GIFT  OF 


THE  SHANTUNG  QUESTION 


,       The 
SHANTUNG  QUESTION 

A    STUDY  IN    DIPLOMACY 

AND    WORLD    POLITICS 

/ 

4 

GE-ZAY   WOOD  B.A.  (Yale),  M.A.  (Harvard) 

Member  of  Chinese  Delegation  to  the  Washington  Conference; 
Curtis  Fellow  in  International  Law  and  Diplomacy,  Colum- 
bia    University,    1919-1921;    Author    of    "China,    the 
United  States,  and  the  Anglo-Japanese  Alliance," 
"The   Twenty-one  Demands,"  "The  Chino- Jap- 
anese  Treaties  of  May  25,  1915,"  etc. 


NEW  YOBK  CHICAGO 

Fleming    H.    Re  veil    Company 

LONDON    AND    EDINBURGH 


Copyright,  1922,  by 
FLEMING  H.  REVELL  COMPANY 


Printed  in  United  States  of  America 


New  York:  158  Fifth  Avenue 
Chicago:  17  North  Wabash  Ave. 
London:  21  Paternoster  Square 
Edinburgh:  75  Princes  Street 


In  Memory  of 

MY  FATHER,  MOTHER,  BROTHER 

And  Other  Members  in  the  Family  Who  Departed  While  I 
Was  Away  in  the  United  States  for  Education 


PREFACE 

\\T  ITH  the  conclusion  of  the  Shantung  Agreement 
at  Washington,  February  4,  1922,  the  serious 
dispute  that  has  been  outstanding  between  Japan  and 
China  for  the  last  seven  or  eight  years  is  removed 
from  the  field  of  international  controversy.  The 
" Shantung  question"  has  been  amicably  settled, 
apparently  to  the  satisfaction  of  both  countries. 

Growing  out  of  the  forcible  seizure  by  Germany  in 
1897  of  the  Kiaochow  Bay  and  the  subsequent  grant 
by  China  of  a  lease  of  the  territory  for  ninety-nine 
years,  the  so-called  Shantung  question  was,  properly 
speaking,  not  a  Shantung  question.  Primarily,  the 
question  was  one  which  concerned  the  leased  terri- 
tory only.  In  view,  however,  of  the  fact  that  the 
entire  province  of  Shantung  was,  upon  the  occupa- 
tion of  the  Kiaochow  Bay  by  Germany,  recognised 
by  Great  Britain  as  a  German  sphere  of  interest,  first 
in  the  declaration  regarding  the  British  occupation 
of  Wei-hai-wei  and  then  in  the  Anglo-German  Rail- 
way Agreement  of  1898,  it  is  not  without  ground  that 
the  question  relating  to  the  leased  territory  has  been 
frequently  designated  as  the  Shantung  question. 

The  term  becomes  more  pertinent  and  more  appro- 
priate with  Japan's  succession  to  the  German  rights 
and  concessions  in  Shantung  after  the  war.  Indeed, 
the  question  can  from  then  on  be  properly  called  the 
Shantung  question.  Japan  has  not  only  taken  the 


6  PREFACE 

German  leased  territory;  she  has  seized  and  con- 
trolled the  Shantung  Railway,  which  extends  far  into 
the  interior  of  the  province ;  she  has  taken  possession 
of  the  rich  coal  and  iron  mines  along  the  railway, 
which  are  found,  not  within  the  area  of  the  leased 
territory,  but  largely  outside  of  it;  she  has  estab- 
lished postal  agencies,  military  barracks,  and  civil 
administration  throughout  the  province;  her  police 
has  guarded  the  railway ;  her  traders  and  merchants 
have  penetrated  all  the  corners  and  nooks  of  the 
province;  in  short,  Japan's  political  and  economic 
activities  have  extended  all  over  the  province.  It  is 
proper  to  say,  therefore,  that  the  question  arising 
out  of  the  German  leasehold,  has  grown  to  be  a  ques- 
tion concerning  the  future  of  the  entire  Shantung 
province. 

The  turning  point  of  the  question  was,  of  course, 
reached  at  the  Versailles  Peace  Conference  where  the 
statesmen  engaged  in  the  task  of  rough-hewing  the 
peace  of  the  world  saw  fit  to  give  the  German  rights 
and  concessions  in  Shantung  to  Japan  instead  of 
restoring  them  to  China.  Had  it  not  been  for  this 
unfortunate  decision,  or  had  the  Conference  decided 
differently,  there  would  have  been  no  Shantung  ques- 
tion in  the  past  few  years. 

Now,  to  all  intents  and  purposes,  the  question  has 
been  settled,  and  the  settlement  reached  at  Washing- 
ton is  nothing  short  of  a  complete  reversal  of  the 
sweeping  terms  embodied  in  the  Versailles  Treaty. 
One  is,  however,  very  naive  indeed  who  thinks  that 
the  last  word  has  been  said  about  the  Shantung  ques- 
tion. Much  remains  to  be  done  before  the  province 
of  Shantung,  where  Confucius  and  Mencius,  two  of 


PREFACE  7 

China's  great  sages,  were  born,  lived,  and  died,  can 
be  completely  restored  to  its  sovereign  owner. 

In  view  of  the  world-wide  interest  that  it  lias 
aroused  and  the  unusual  significance  that  has  been 
attached  to  it,  the  Shantung  question,  no  matter  what 
further  development  the  future  may  yet  hold  in 
store,  will  remain  a  permanent  and  interesting  chap- 
ter in  the  history  of  international  politics  in  the  Far 
East.  No  apology  is  necessary,  therefore,  for  the 
appearance  of  this  volume,  in  which  the  complete 
story  of  the  question  is  told  with  all  the  available 
documents.  Much  of  the  material  was  originally 
prepared  by  the  author  and  used  for  publicity 
purpose  by  the  Press  Department  of  the  Chinese  dele- 
gation at  the  Washington  Conference,  which  is  now 
incorporated  in  this  volume  with  but  slight  changes. 
The  readers  are  invited  to  consult  the  two  other 
volumes,  The  Twenty-one  Demands  and  The  Chino- 
Japanese  Treaties  of  May  25,  1915,  which  have  a 
close  bearing  upon  several  phases  of  the  Shantung 
question. 

In  the  preparation  of  this  volume  the  author  is 
greatly  indebted  to  many  of  his  friends  who  have 
assisted  him  in  the  gathering  of  the  material  and 
placed  at  his  disposal  many  important  documents 
bearing  on  the  Shantung  question,  which  are  other- 
wise inaccessible.  A  few  of  the  documents,  now 
incorporated  in  this  volume  either  in  the  text  or  in 
the  appendices,  have  not  hitherto  become  public 
property  and  have  appeared  here  for  the  first  time. 
The  author  has  adopted  it  as  his  policy  to  give  the 
complete  text,  whenever  possible,  of  every  official 
document  he  cites,  instead  of  quoting  mere  extracts 


8  PREFACE 

therefrom.  It  is  hoped  that  this  policy  will  meet 
the  approval  of  those  who  care  to  make  a  docu- 
mentary study  of  the  question,  but  who  have  neither 
the  time  nor  opportunity  to  make  an  extended  inves- 
tigation. 

Finally,  it  may  be  said,  a  study  of  the  Shantung 
question  is  necessarily  a  study  of  diplomacy  and 
international  politics.  Although  the  settlement  of 
the  question  has  removed  it  from  the  front  pages  of 
newspapers  and  has  left  it  with  little  more  than 
historical  interest,  the  complete  story  of  its  gradual 
development,  saturated  as  it  was  with  diplomatic 
sharp  practice  and  intrigue,  and  pregnant  with 
unusual  political  significance,  will  forever  remain  an 
enlightening,  instructive,  though  not  necessarily 
edifying,  lesson  for  students  of  world  politics. 

G.  ZAY  WOOD 

New  York. 


CONTENTS 

CHAPTER  PAGE 

I.    INTRODUCTION 13 

II.    GERMAN  OCCUPATION  OF  KIAOCHOW  BAY       .     .  24 

III.  GERMANY  IN  SHANTUNG 34 

IV.  THE  FALL  OF  TSINGTAO 40 

V.    JAPAN  AND  THE  TSINGTAO  CUSTOMS  OFFICE    .     .  54 

.  VI.    SHANTUNG  AND  THE  TWENTY-ONE  DEMANDS    .     .  60 

VII.    ALLIED  SECRET  AGREEMENTS  ON  SHANTUNG  .     .  66 

VIII.     CHINA  AND  THE  WAR 82 

IX.    THE  SECRET  AGREEMENTS  OF  1918       ....  96 
X.    THE  SHANTUNG  QUESTION  AT  THE  PEACE  CON- 
FERENCE AT  VERSAILLES 102 

XI.    THE  SHANTUNG  "SETTLEMENT"  AND  ITS  AFTER- 
MATH        150 

XII.    THE  SHANTUNG  QUESTION  IN  THE  UNITED  STATES 

SENATE .  159 

XIII.  THE  RAILWAYS  IN  SHANTUNG    .     .     .     .     .     .  172 

XIV.  THE  MINES  IN  SHANTUNG 183 

XV.    JAPAN'S  CONTROL  OF  COMMERCIAL  FACILITIES      .  193 

XVI.    JAPAN'S  PEACEFUL  PENETRATION  OF  SHANTUNG  198 

XVII.    ATTEMPTS  AT  DIRECT  NEGOTIATION       ....  213 
XVIII.    THE  SHANTUNG  QUESTION  AT  THE  WASHINGTON 

CONFERENCE 237 

XIX.    THE    NEW  SHANTUNG  SETTLEMENT     ....  266 

XX.     CONCLUSION 278 

APPENDICES 

A.  CONVENTION  BETWEEN  CHINA  AND  GERMANY  RESPECT- 

ING THE  LEASE  OF  KIAOCHOW  BAY  TO  GERMANY, 

MARCH  6,  1898 281 

B.  AGREEMENT  BETWEEN  CHINA  AND  GERMANY  RESPECT- 


10  CONTENTS 

ING  THE  KlAOCHOW-TsiNAN   RAILWAY   REGULATIONS, 

MARCH  21,  1900        286 

C.  CONVENTION  BETWEEN  CHINA  AND  GERMANY  RESPECT- 

ING THE  WITHDRAWAL  OF  GERMAN  TROOPS  FROM 
KIAOCHOW  AND  KAOMi,  NOVEMBER  28,  1905  .  .  292 

D.  AGREEMENT  BETWEEN  THE  PROVINCIAL  AUTHORITIES 

OF  SHANTUNG  AND  THE  CHINO-GERMAN  MINING 
COMPANY  FOR  DELIMITING  MINING  AREAS  IN  THE 
PROVINCE  OF  SHANTUNG,  JULY  24,  1911  ....  294 

E.  NOTES  ON  THE  ESTABLISHMENT  AND  THE  ABOLITION  OF 

THE  SPECIAL  WAR  ZONE  IN  SHANTUNG     ....     297 

F.  NOTES  PROTESTING  AGAINST  VIOLATION  OF  THE  NEU- 

TRALITY OF  CHINA  AND  THE  OCCUPATION  OF  THE 

KlAOCHOW-TsiNAN   RAILWAY 301 

G.  CHINA'S   DECLARATION    OF   WAR   ON    GERMANY   AND 

AUSTRIA-HUNGARY,  AUGUST  14,  1917       ....     308 

H.  SECRET  AGREEMENTS  BETWEEN  CHINA  AND  JAPAN, 
CONTAINING  NOTES  EXCHANGED,  SEPTEMBER  24, 
1918,  BETWEEN  THE  CHINESE  MINISTER  AT  TOKIO 
AND  THE  JAPANESE  MINISTER  OF  FOREIGN  AFFAIRS, 
RESPECTING  THE  CONSTRUCTION  OF  THE  TSINAN- 
SHUNTEH  AND  KAOMI-HSUCHOW  RAILWAYS,  THE 
ADJUSTMENT  OF  QUESTIONS  CONCERNING  SHANTUNG, 
THE  CONSTRUCTION  OF  FOUR  RAILWAYS  IN  MAN- 
CHURIA AND  MONGOLIA,  AND  THE  PRELIMINARY  CON- 
TRACTS FOR  THE  ABOVE-MENTIONED  RAILWAYS  .  .  311 

I.  MEMORANDUM  PRESENTED  TO  THE  PEACE  CONFERENCE 
AT  VERSAILLES  BY  THE  CHINESE  DELEGATION  CON- 
TAINING PROVISIONS  FOR  INSERTION  IN  THE  PRELIM- 
INARIES OF  PEACE  WITH  GERMANY 319 

J.  THE  CLAIM  OF  CHINA  FOR  DIRECT  RESTITUTION  TO 
HERSELF  OF  THE  LEASED  TERRITORY  OF  KIAOCHOW, 
THE  TSINGTAO-TSINAN  RAILWAY  AND  OTHER  GERMAN 
RIGHTS  IN  RESPECT  OF  SHANTUNG  PROVINCE  .  .  323 

K.  LETTER  OF  PROTEST  ON  THE  SHANTUNG  SETTLEMENT 
TO  PRESIDENT  WILSON  BY  GENERAL  TASKER  H. 
BLISS,  APRIL  29,  1919 336 


CONTENTS  11 

L.  MEMORANDUM  PREPARED  FOR  THE  STRICTLY  CONFI- 
DENTIAL USE  OF  THE  CHINESE  DELEGATION  AT  THE 
PEACE  CONFERENCE,  BASED  ON  THE  RECORDS  OF  THE 
COUNCIL  OF  THE  PRINCIPAL  ALLIED  AND  ASSOCIATED 
POWERS,  AND  CONTAINING  THE  ASSURANCES  GIVEN 
BY  THE  JAPANESE  RESPECTING  THE  EVENTUAL 
RESTORATION  TO  CHINA  OF  THE  LEASED  TERRITORY 

OF    KlAOCHOW    AND    THE    DISPOSAL    OF    THE    GERMAN 

RIGHTS  IN  SHANTUNG 340 

M.  LETTER  OF  THE  AMERICAN  CHAMBER  OF  COMMERCE  OF 
CHINA  TO  THE  AMERICAN  MINISTER  IN  PEKING  ON 
THE  DISPOSITION  OF  THE  GERMAN  LEASED  TERRITORY 
IN  SHANTUNG,  DECEMBER  16,  1918 342 

N.  MEMORANDUM  BY  THE  BRITISH  CHAMBER  OF  COM- 
MERCE ON  THE  FUTURE  OF  TSINGTAO 344 

0.  WALSH  RESOLUTION  IN  THE  SENATE  OF  THE  UNITED 
STATES,  JANUARY  20,  1922,  ON  THE  SHANTUNG 
QUESTION  348 

P.  TREATY  FOR  THE  SETTLEMENT  OF  OUTSTANDING  QUES- 
TIONS RELATIVE  TO  SHANTUNG,  SIGNED  AT  WASH- 
INGTON, FEBRUARY  4,  1922 351 

Q.  TERMS  OF  UNDERSTANDING  AS  RECORDED  IN  THE 
MINUTES  OF  THE  CHINESE  AND  JAPANESE  DELEGA- 
TIONS CONCERNING  THE  CONCLUSION  OF  THE  '  *  TREATY 
FOR  THE  SETTLEMENT  OF  OUTSTANDING  QUESTIONS 
RELATIVE  TO  SHANTUNG."  ....  361 


THE  SHANTUNG  QUESTION 


INTRODUCTION 

IN  the  history  of  international  politics  there  are 
but  few,  if  any,  incidents,  the  magnitude  and 
significance  of  which  can  at  all  be  compared  to 
the  magnitude  and  significance  of  what  has  been 
known  as  the  Shantung  question.  In  fact,  it  may 
safely  be  said  that  there  is  no  single  instance  in 
modern  history — not  excepting  the  ruthless  dismem- 
berment of  Poland,  the  gradual  subjugation  of  India, 
and  the  shameless  annexation  of  Alsace-Lorraine  and 
of  Korea — which  has  stood  out  so  conspicuously  as  a 
case  of  imperialism  and  international  immorality,  or 
which  has  aroused  so  much  moral  indignation 
throughout  the  world  as  has  this  so-called  Shantung 
question. 

Looked  at  in  its  simplest  elements,  the  Shantung 
question  represented  the  wilful  and  deliberate 
aggression  by  one  Power  upon  another.  Like  the 
partition  of  Poland,  the  annexation  of  Korea  and 
other  similar  acts  of  international  aggrandisement, 
the  seizure  of  Shantung,  first  by  Germany  and  then 
by  Japan,  was  actuated  by  that  spirit  of  expansion, 
which  seems  to  have  taken  possession  of,  not  Ger- 
many or  Japan  alone,  but  all  the  states  with  a 

13 


14  THE  SHANTUNG  QUESTION 

penchant  for  territorial  aggrandisement.  Germany 
was,  of  course,  the  first  Power  to  start  what  has 
sometimes  been  styled  the  game  of  international 
scramble  in  China  towards  the  end  of  the  nineteenth 
century,  but  she  was  by  no  means  the  first  Power  to 
bring  about  China's  break-up.  Chinese  territory 
had  been  annexed  by  Great  Britain  as  far  back  as 
1842  when,  as  a  result  of  the  Opium  War,  China  was 
forced  to  give  up  Hongkong  as  a  part  of  the  price  of 
peace.  On  the  other  hand,  Shantung,  a  province  of 
55,984  square  miles,  with  a  population  generally  esti- 
mated to  be  over  30,000,000  and  its  natural  wealth 
equalled  by  few  and  surpassed  by  none  of  the  other 
provinces,  was  sure  enough  attraction  for  Germany. 

The  forced  lease  of  Kiaochow,  which  marked  the 
beginning  of  the  regime  of  spheres  of  interest  or  of 
influence  in  China,  marked  also  the  beginning  of  the 
Shantung  question.  But  the  end  which  was  brought 
about  by  the  war  to  Germany's  occupation  of  the 
leased  territory  did  not  mean  the  end  of  the  regime 
of  the  spheres  of  interest  or  the  end  of  the  Shantung 
question.  On  the  very  contrary,  the  dispossession  of 
Germany  by  Japan,  with  no  mean  assistance  from 
Great  Britain,  was  achieved  with  no  other  purpose 
in  view  than  that  of  making  Shantung  a  Japanese 
sphere.  Germany  was,  in  1914,  called  upon  to  hand 
over  her  Shantung  possessions  to  Japan  so  that  they 
could  be  restored  to  China.  But  restoration  without 
condition  was  not  among  the  schemes  contemplated 
by  Japan,  and  the  conditions  which  she  proposed 
were  as  difficult  of  acceptance  by  China  as  it  was 
difficult  for  Japan  to  effect  restoration  without  them. 

Since  the  formal  grant  by  China  of  the  lease  on 


INTRODUCTION  IS 

March  6, 1898,  Germany  had  availed  herself  of  every 
opportunity  to  develop  the  territory  leased  to  her  for 
ninety-nine  years,  and  to  make  use  of  the  rich  natural 
resources  for  which  Shantung  is  justly  reputed.  She 
had  established  at  Tsingtao  a  model  foreign  settle- 
ment; she  had  given  the  port  the  best  of  harbour 
works  known  in  the  Far  East ;  she  had  constructed  the 
Kiaochow-Tsinan  Railway  and  its  branches ;  she  had 
operated  the  iron  and  coal  mines  along  the  railway ; 
in  short,  every  privilege  which  China  had  granted  to 
her  was  made  use  of  with  zest.  The  seeds  of  aggres- 
sion began  to  blossom  in  the  years  of  peace  and  active 
promotion  that  followed.  The  German  Government 
sowed  them,  German  capital  watered  them,  and  Ger- 
man energy  cultivated  them ;  and  it  was  the  Germans 
first  who  reaped  the  fruits. 

Everything  went  along  with  promise  for  almost 
fifteen  years.  And  then  broke  out  the  European  war 
in  August,  1914,  which  set  the  whole  world  aflame. 
German  prospect  in  Shantung  was  doomed  wihen 
Japan  decided  to  take  over  Kiaochow  and  m^ke  room 
for  herself.  On  November  7,  Tsingtao  was  captured 
by  the  Anglo-Japanese  forces.  The  British  con- 
tingent soon  withdrew,  leaving  the  Japanese  in  Shan- 
tung to  enjoy  the  fruits  of  German  labor  and  to  make 
further  encroachments  upon  China. 

The  dispossession  of  Germany  of  her  rights  in 
Shantung  was  not  so  serious  a  matter  as  Japan's 
succession  to  them.  It  should  be  noted  that  the  so- 
called  Shantung  question  was,  in  the  first  stage  of  its 
development,  nothing  more  than  a  question  between 
China  and  Germany  with  respect  to  the  Kiaochow 
leased  territory  in  particular  and  the  Shantung 


16  THE  SHANTUNG  QUESTION 

province  as  a  German  sphere  of  interest  in  general. 
Japan's  capture  of  the  leasehold  had  the  effect  of 
making  it  a  spoil  of  war,  and  her  stepping  into  the 
German  boots  in  Shantung  introduced  a  new  and 
decidedly  formidable  factor  into  the  question,  that 
surely  rendered  its  solution  difficult  if  not  impossible. 
What  was  originally  a  question  between  China  as  the 
lessor  and  Germany  as  the  lessee,  now  became  a  ques- 
tion between  Japan  as  the  victor  in  the  war  and  Ger- 
many as  the  defeated. 

In  1915  Japan  sought  to  impose  upon  China  the 
terms  of  what  she  considered  to  be  a  just  settlement 
of  the  Shantung  question.  These  terms  were  em- 
bodied in  the  notorious  Twenty-one  Demands,  pre- 
sented to  China  on  January  18,  1915,  and  accepted 
in  part  on  May  7  of  the  same  year.  They  included 
China's  assent  to  the  direct  disposition  between 
Japan  and  Germany  of  the  German  rights,  interests 
and  concessions  in  Shantung,  and  to  the  building  by 
Japan  of  a  railway  from  Chefoo  or  Lungkow  to  join 
the  Kiaochow-Tsinan  Railway. 

In  1917,  in  anticipation  of  China's  participation  in 
the  war,  Japan  entered  into  secret  agreements  with 
her  European  Allies,  Great  Britain,  France,  Italy, 
and  Russia,  whereby  she  was  assured  by  them  to  sup- 
port her  claim  at  the  Peace  Conference  to  succeed  to 
the  rights  and  concessions  which  Germany  had  held 
in  Shantung. 

This  move,  on  the  part  of  Japan,  greatly  compli- , 
cated  the  Shantung  question,  and  made  it  practically 
impossible  to  arrive  at  a  just  and  equitable  solution 
which  the  Chinese  people  had  eagerly  looked  for. 

The  question  was  further  complicated  by  China's 


INTRODUCTION  17 

declaration  of  war  upon  Germany,  on  August  14, 
1917,  which,  according  to  all  the  accepted  tenets  of 
International  Law,  abrogated  the  Convention  of 
March  6,  1898,  under  which  Germany  had  acquired 
her  title  to  the  leased  territory  in  Shantung.  Upon 
the  abrogation  of  the  lease,  German  rights  and  con- 
cessions reverted  back  to  China.  Y  ^ 

In  1918  Japan  entered  into  secret  understandings 
with  the  Chinese  Minister  at  Tokio  whereby  she  was 
promised  the  right  to  construct  two  railway  lines 
between  Tsinan  and  Shunteh  and  between  Kaomi  and 
Hsuchow.  She  was  also  given  the  right  of  prefer- 
ence to  other  " suitable  lines"  in  Shantung  if  the  said 
two  should  be  deemed  as  unprofitable  undertaking. 

This  was  in  substance  the  situation  of  the  Shantung 
question  when  the  Peace  Conference  at  Versailles 
began  its  sessions.  Armed  with  the  treaty  which  she 
had  forced  from  China  as  a  result  of  the  Twenty-one 
Demands  in  1915,  the  secret  agreements  between  her- 
self and  the  Allied  Powers,  and  the  secret  understand- 
ings with  the  Chinese  Minister  at  Tokio,  Japan  came 
to  the  Conference  to  demand  her  " pound  of  flesh." 
She  insisted  that  Shantung  must  be  awarded  to  her, 
instead  of  China.  The  story  of  the  Shantung  settle- 
ment at  the  Versailles  Peace  Conference  will  be  told 
in  a  later  chapter  in  all  its  details.  For  the  present 
it  is  sufficient  to  say  that  the  Allied  statesmen  yielded 
to  Japan's  demand.  The  result  is  that  the  following 
clauses,  said  to  have  been  drafted  by  a  Japanese 
expert,  were  embodied  in  the  Treaty  of  Peace  with 
Germany : 


18  THE  SHANTUNG  QUESTION 

PART  IV,  SECTION  VIII 

SHANTUNG 

Article  156 

Germany  renounces,  in  favour  of  Japan,  all  her  rights,  title, 
and  privileges — particularly  those  concerning  the  territory  of 
Kiaochow,  railways,  mines,  and  submarine  cables — which  she 
acquired  in  virtue  of  the  Treaty  concluded  by  her  with  China  on 
March  6,  1898,  and  of  all  other  arrangements  relative  to  the 
Province  of  Shantung. 

All  German  rights  in  the  Tsingtao-Tsinanfu  Railway,  includ- 
ing its  branch  lines  together  with  its  subsidiary  property  of  all 
kinds,  stations,  shops,  fixed  and  rolling  stock,  mines,  plant, 
and  material  for  the  exploitation  of  the  mines,  are  and  remain 
acquired  by  Japan,  together  with  all  rights  and  privileges 
attaching  thereto. 

The  German  State  submarine  cables  from  Tsingtao  to  Shang- 
hai and  from  Tsingtao  to  Chef oo,  with  all  the  rights,  privileges, 
and  properties  attaching  thereto,  are  similarly  acquired  by 
Japan,  free  and  clear  of  all  charges  and  encumbrances. 

Article  157 

The  movable  and  immovable  property  owned  by  the  German 
State  in  the  territory  of  Kiaochow,  as  well  as  all  the  rights 
which  Germany  might  claim  in  consequence  of  the  works  or 
improvements  made  or  of  the  expenses  incurred  by  her,  directly 
or  indirectly  in  connection  with  this  territory,  are  and  remain 
acquired  by  Japan,  free  and  clear  of  all  charges  and  encum- 
brances. 

Article  158 

Germany  shall  hand  over  to  Japan  within  three  months  from 
the  coming  into  force  of  the  present  Treaty  the  archives,  regis- 
ters, plans,  title-deeds,  and  documents  of  every  kind,  wherever 
they  may  be,  relating  to  the  administration,  whether  civil, 
military,  financial,  judicial,  or  other,  of  the  territory  of  Kiao- 
chow. 

Within  the  same  period  Germany  shall  give  particulars  to 
Japan  of  all  treaties,  arrangements,  or  agreements  relating  to 
the  rights,  title,  or  privileges  referred  to  in  the  two  preceding 
Articles. 


INTRODUCTION  19 

Such  is  the  language  of  tl?  treaty  provisions 
whereby  all  the  rights  and  concessions  which  Ger- 
many had  enjoyed  in  Shantung  before  the  war  were 
turned  over  to  Japan,  "  instead  of  restoring  them  to 
China,  the  legitimate  sovereign  of  the  territory  and 
loyal  co-belligerent  by  the  side  of  the  Allied  and 
Associated  Powers  in  the  War."  Japan  got  all  she 
had  wanted,  and  a  good  deal  more.  Beside^  the 
German  state  property  which  was  found  in  the  form 
of  government  buildings,  barracks,  magazines,  har- 
bours, banks,  submarine  cables,  and  a  thousand  and 
one  other  things,  Japan  also  acquired,  "free  and  clear 
of  all  charges  and  encumbrances,"  mines,  plants, 
railways,  and  their  subsidiary  properties,  which  were, 
strictly  speaking,  private,  and  not  state,  properties 
and  were,  therefore,  not  subject  to  confiscation 
according  to  the  ordinary  rules  of  International  Law. 
There  can  be  no  denying  that  these  Shantung  pro- 
visions were  so  sweeping  that  they  surpassed  Japan's 
own  prof  oundest  hopes.  They  read  like  an  inventory 
of  the  German  properties  and  possessions  in  Shan- 
tung to  be  transferred  to  Japan,  without  the  slightest 
reference  to  China.  From  the  Japanese  point  of 
view,  they  were,  it  may  be  truthfully  said,  so  inclusive 
that  hardly  a  thing  was  left  to  which  Japan  could  not 
lay  her  claim  by  right  of  the  Versailles  Treaty.  From 
the  Chinese  point  of  view,  they  were  so  exclusive  that 
there  was  absolutely  nothing  left  to  China  which 
was  of  any  value.  The  Allied  statesmen — the 
"Big  Three"  so  called,  President  Wilson,  Georges 
Clemenceau  and  Lloyd  George,  having  decided  to 
give  Japan  what  she  had  demanded,  took  the  attitude 
of  a  generous  donor  who,  anxious  to  curry  favour  with 


20  THE  SHANTUNG  QUESTION 

her,  bestowed  upon  one  ally  all  the  riches  in  Shantung 
at  the  expense  of  another  ally.  "Help  yourself,  and 
if  you  do  not  find  what  you  want,  ask  for  it"  seemed 
to  sum  up  fairly  well  the  position  of  the  "Big  Three" 
who  had  thus  permitted  themselves  to  be  the  willing 
tools  in  the  spoliation  of  China. 

With  this  unfortunate  decision  by  the  Versailles 
Peace  Conference,  the  Shantung  question  now  at- 
tained the  maximum  of  complicacy.  Private  under- 
standings and  public  engagements  had  woven  around 
it  such  a  thick  web  of  diplomacy  that  it  was  very  diffi- 
cult to  extricate.  It  ceased  to  be  a  question  between 
China  and  Germany;  it  was  no  longer  a  question 
between  Japan  and  Germany  or  between  China  and 
Japan ;  it  became  a  question  between  China  on  the  one 
side  and  Japan  and  the  other  Allied  and  Associated 
Powers  on  the  other.  Prom  one  concerning  chiefly 
the  localised  area  of  a  leased  territory,  the  question 
became  one  that  threatened  the  integrity  of  China  as 
a  whole.  With  the  Kiaochow-Tsinan  Railway  and 
its  branches  in  Japan's  firm  grasp,  which,  it  should 
be  said,  are  the  main  economic  arteries  of  the 
province  and  the  direct  lines  of  communication  with 
Peking  and  the  rest  of  China,  it  is  more  than  evident 
that  Japan  could  have  under  her  thumbnail  the  seat 
of  the  Chinese  Government.  The  situation  thus 
created  could  not  be  conducive  to  the  safety  and  integ- 
rity of  China.  A  glance  at  the  geography  of  North 
China  is  sufficient  to  convince  any  one  who  refuses  to 
believe  the  seriousness  of  the  situation.  It  should 
be  borne  in  mind  that  Japan  has  already  had  a 
strangle-hold  upon  Manchuria  where  she  has  con- 
trolled the  South  Manchurian  Railway  ever  since 


INTRODUCTION  21 

the  conclusion  of  the  Russo-Japanese  war.  Now,  by 
the  " settlement"  reached  by  the  "Big  Three,"  Japan 
was  given  all  the  German  possessions  in  Shantung, 
the  Kiaochow-Tsinan  Railway  included.  With  one 
foot  in  Shantung  and  another  in  South  Manchuria, 
commanding  the  gulf  of  Pechili,  which  is  the  most 
important  gateway  of  North  China,  and  controlling 
the  South  Manchurian  Railway  and  the  Kiaochow- 
Tsinan  Railway,  two  of  the  quickest  approaches  from 
the  sea  to  the  capital  of  the  Chinese  Republic,  Japan 
would  be  in  a  position  to  throttle  the  Peking  Govern- 
ment at  a  moment's  notice.  "The  jaws  of  a  pair  of 
pincers  threatening  a  nut  would  not  be  a  circum- 
stance comparable  to  the  menace  of  Japanese 
influence  on  the  metropolitan  province  and  Peking." 
"Such  a  virtual  substitution  of  Japan  for  Germany 
in  Shantung  is  serious  enough  in  itself,  but  it  becomes 
grave  when  the  position  of  Japan  in  Southern  Man- 
churia and  Eastern  Mongolia  is  read  in  connection 
with  it.  Firmly  intrenched  on  both  sides  of  the  gulf 
of  Pechili,  the  water  outlet  of  Peking,  with  a  hold 
on  three  trunk  lines  from  Peking  and  connecting  it 
with  the  rest  of  China,  the  capital  becomes  but  an 
enclave  in  the  midst  of  Japanese  influence."  This 
was  exactly  the  situation  created  by  the  Shantung 
"settlement"  reached  by  the  "Big  Three"  at  the 
Versailles  Peace  Conference. 

China  could  not,  of  course,  accept  the  situation. 
She  refused  to  sign  the  Versailles  Treaty.  The  United 
States,  having  signed  it,  did  not  ratify  it.  But  the 
treaty  came  into  force  upon  the  ratification  by  three 
of  the  Principal  Allied  and  Associated  Powers. 
Legally,  it  could  never  be  binding  upon  China  or  the 


22  THE  SHANTUNG  QUESTION 

United  States.  But  the  fact  that  it  was  binding  upon 
Japan,  Great  Britain,  Italy,  Prance,  and  the  other 
Allied  Powers,  and  not  upon  China  and  the  United 
States,  created  another  situation  that  made  its  recon- 
sideration and  revision  extremely  difficult.  It  was 
the  admitted  policy  on  the  part  of  the  Peking  Gov- 
ernment to  bring  the  Shantung  question  before  the 
Council  of  the  League  of  Nations  for  consideration. 
Its  favourable  action  was,  however,  highly  question- 
able, in  view  of  the  fact  that  the  Powers  represented 
on  the  Council  of  the  League  were,  with  the  exception 
of  China,  signatories  to  the  Versailles  Treaty.  At 
the  Washington  Conference,  it  was  the  avowed  inten- 
tion of  the  Chinese  delegates  to  present  the  Shantung 
question  in  one  of  its  plenary  sessions.  But  this 
could  not  be  done  because  of  the  fact  that  out  of  the 
nine  Powers  attending  the  Conference  six  had  signed 
the  Versailles  Treaty. 

Three  attempts  or  overtures  were  made  by  Japan 
to  China  for  " direct  negotiation"  looking  towards 
the  restoration  of  the  Shantung  province,  since  the 
Versailles  Treaty  had  come  into  force ;  and  for  three 
times  China  set  her  face  resolutely  against  direct 
negotiation,  to  which  the  people  had  been  vigorously 
and  vociferously  opposed.  The  ground  was  that 
China  could  not  undertake  any  negotiation  with 
respect  to  the  Shantung  question  on  the  basis  of  the 
Versailles  Treaty  to  which  she  was  not  a  consenting 
party.  In  the  point  of  law,  this  position  was  unas- 
sailable; as  a  matter  of  fact,  however,  it  served  to 
retard  the  early  solution  of  the  Shantung  question. 
With  China  it  became  a  matter  of  importance  to 
revise  the  terms  of  the  Versailles  settlement  or  to 


INTRODUCTION  23 

enter  into  new  ones  in  order  to  nullify  them.  Now, 
who  could  revise  them  or  would  be  willing  to  do  so  ? 
Not  Japan  herself;  not  the  Allied  Powers;  not  the 
League  of  Nations  in  which  President  Wilson,  one  of 
the  three  statesmen  responsible  for  the  Shantung 
decision  at  the  Peace  Conference,  seemed  to  have 
entertained  great  confidence  for  rectifying  this  great 
injustice;  and  even  the  Washington  Conference 
which  was  called  partly  to  discuss  the  Pacific  and 
the  Far  Eastern  problems  refused  to  take  cognisance 
of  the  Shantung  question.  China  herself  could  not 
revise  the  Versailles  settlement;  the  best  she  could 
accomplish  was  to  come  to  such  terms  with  Japan  as 
to  effect  a  reversal  of  or  to  nullify  the  Versailles 
provisions.  Under  no  circumstance  could  this  be 
accomplished  without  direct  negotiation,  however 
strongly  opposed  to  it  the  popular  sentiment  in  China 
was  at  the  time. 

Happily,  however,  the  Washington  Conference 
came  upon  a  different  and  new  procedure.  Without 
running  counter  to  the  well-expressed  sentiment  of 
the  people  in  China,  the  Chinese  and  the  Japanese 
delegates  to  the  Conference  commenced  the  Shantung 
" conversations"  in  the  presence  of  the  American  and 
British  " observers"  who,  except  making  occasional 
observations,  took  no  part  in  the  negotiation.  After 
thirty-six  laborious  meetings,  the  Chinese  and  the 
Japanese  delegates  reached  an  agreement  relative  to 
the  Shantung  question,  the  terms  of  which  were 
nothing  short  of  a  negation  of  the  Versailles  settle- 
ment. With  the  Allied  Powers  the  Versailles  Treaty  / 
remains  binding  now  as  ever  before ;  with  China  it  [ 
has  lost  its  terror. 


II 

GERMAN  OCCUPATION  OF  KIAOCHOW  BAY 

THE  occupation  of  Kiaochow  Bay  by  Germany 
was   an  incident  of  great  importance   and 
interest,  which  must  be  told  with  reasonable 
details  in  order  to  furnish  a  complete  diplomatic 
background  of  the  Shantung  question. 

The  immediate  result  of  the  Chino-Japanese  war 
of  1894-1895,  which,  to  borrow  the  language  of  an 
authority  of  International  Law,  "had  destroyed  the 
fame  of  one  nation  and  made  that  of  another,"  was 
an  invitation,  as  it  were,  to  the  European  Powers  for 
political  and  economic  encroachments  upon  China.  It 
is  to  be  admitted  that  China's  miserable  defeat  in 
the  war  revealed  her  desperate  weakness  and  absolute 
helplessness  to  the  world  much  more  glaringly  than 
ever  before,  and  the  European  Powers  were  quick  to 
see  their  opportunity  for  further  aggrandisement  at 
her  expense.  It  was  precisely  at  this  moment  that  the 
cry  of  the  "break-up  of  China"  was  on  everybody's 
lips,  and  it  was  exactly  at  this  moment  that  the 
Powers  in  Europe,  not  satisfied  with  what  they  had 
already  acquired  from  China  in  the  past,  actually 
contemplated  of  her  dismemberment. 

The  first  Power  who  took  advantage  of  China's 
weakness  and  helplessness  was  Germany,  who,  unlike 
France,  Great  Britain,  Kussia,  or  Japan,  had 
hitherto  no  territorial  possessions  either  in  China  or 

24 


GERMAN  OCCUPATION  OF  KIAOCHOW  BAY      25 

in  the  Far  East,  and  who  was  therefore  unusually 
anxious  to  seize  the  first  possible  opportunity  to  place 
herself  on  an  equal  footing  with  the  rest  of  the 
Powers.  In  the  month  of  January,  1897,  a  German 
expert  in  harbour-building  and  engineering  was  sent 
to  China  by  the  Berlin  Government,  in  response  to  a 
suggestion  made  in  the  previous  year  by  the  German 
Eear-Admiral  on  the  China  station.  Germany  was 
then  most  anxious  to  secure  on  the  China  coast  an 
ice-free  port,  which  could  serve  "as  a  rendezvous  for 
her  vessels"  and  as  "a  coaling  station"  so  as  to  make 
her  position  in  the  Far  East  in  general  and  in  China 
in  particular  not  unequal  to  that  of  the  other  Powers. 
The  report  prepared  by  the  German  expert  as  a  result 
of  his  investigation  along  the  Chinese  coast  was  most 
favourable  to  the  establishment  of  a  German  naval 
base  at  Kiaochow  Bay.  The  German  Minister  in 
Peking  made,  under  instructions  from  Berlin,  imme- 
diate overtures  to  the  Chinese  Government  for  the 
lease  of  the  bay  and  its  surrounding  territories. 

In  this  connection,  it  is  important  to  remember  that 
Germany  wanted,  in  the  first  place,  a  naval  base  in 
the  Chinese  waters  for  the  protection  of  German  com- 
merce and  for  the  upholding  of  German  prestige  in 
the  Far  East.  It  is,  of  course,  unnecessary  to  add 
that  the  search  for  a  naval  base  in  the  Far  East  was 
but  one  of  the  details  incident  to  the  execution  of  the 
ambitious  naval  programme  that  Germany  was  about 
to  adopt.  And  secondly,  it  should  also  be  borne  in 
mind  that  the  German  expert,  who  was  sent  out  to 
China  to  look  over  the  ground,  decided  upon  Kiao- 
chow Bay  only  after  he  had  found  out  that  Samsa 
Bay,  Wei-hai-wei,  and  Samman  Bay  were  useless 


26  THE  SHANTUNG  QUESTION 

for  such  purpose.  That  such  was  the  case  was 
admitted  by  the  German  Kaiser  himself.*  He  based 
his  choice,  however,  not  only  on  the  strength  of  the 
usefulness  of  the  port  as  a  naval  base,  but  also  on 
the  wealth  of  natural  resources  in  the  hinterland.  It 
was  very  natural,  therefore,  that  the  German  diplo- 
mat in  the  Chinese  capital,  under  instructions  and 
inspirations  from  Berlin,  had  made  repeated  over- 
tures to  the  Chinese  Government  for  the  lease  of  the 
Kiaochow  Bay,  and  not  of  the  other  bays  and  har- 
bours along  the  Chinese  coast. 

To  these  overtures  the  Chinese  Government, 
though  greatly  weakened  by  the  war  with  Japan,  was 
yet  firm  enough  to  lend  a  deaf  ear.  Neither  the  Ger- 
man Minister  nor  the  German  Government  knew 
how  to  proceed.  At  this  very  moment,  however,  an 
accident  took  place,  which  the  German  Government 
immediately  made  use  of  to  bring  about  the  realisa- 
tion of  its  ambition.  On  the  first  of  November,  1897, 
three  German  Catholic  missionaries  (named  Nies, 
Henle,  and  Stenz)  were  attacked  by  a  Chinese  mob 
in  a  village  named  Chang-chia  in  the  Tsao-chow  pre- 
fecture of  the  Shantung  province.  The  first  two 
named  were  seriously  wounded  and  finally  died,  and 
the  third  escaped  unhurt. 

In  this  unhappy  incident,  Germany  saw  immedi- 

*  A  German  historical  writer  stated  (in  a  book  published  under  German 
Imperial  patronage)  that  the  occupation  of  Kiaochow  Bay  was  carried 
out  as  the  result  of  a  proposal  by  Bishop  Anzer,  then  a  very  well-known 
German  missionary  in  China.  Kaiser  Wilhelm  II  denied,  however,  the 
truth  of  the  statement,  and  in  the  margin  of  the  book,  he  commented  on 
it  in  the  following  language:  "Wrong.  I  selected  Kiaochow  after  I  had 
had  Samsa  Bay  and  Wei-hai-wei  reconnoitered.  Both  were  reported  to 
me  as  wholly  unsuitable.  I  thereupon  took  Baron  von  Richtho fen's  book 
and  a  map  of  China,  and  after  reading  his  chapter  on  Shantung,  I  decided 
for  the  port  of  Kiaochow,  as  Baron  von  Richthofen's  opinion  of  the  Hinter- 
land was  remarkably  favourable.  Bishop  Anzer  had  nothing  to  do  with  the 
decision."— The  Spectator,  December  14,  1907,  p.  969. 


GERMAN  OCCUPATION  OF  KIAOCHOW  BAY      27 

ately  her  desired  opportunity  to  translate  her  dream 
into  reality.  She  came  to  an  understanding  with 
Eussia  first,  to  whom,  according  to  the  notorious 
Cassini  Convention,  Kiaochow  Bay  was  to  be  leased. 
On  the  10th  of  November,  1897,  while  the  negotiation 
for  the  settlement  of  the  incident  was  still  pending, 
the  German  cruiser  division  in  the  Far  Eastern 
waters,  commanded  by  Admiral  Diederichs,  later  of 
Manila  fame  in  his  tilt  with  Admiral  Dewey  of  the 
United  States  during  the  Spanish-American  war, 
arrived  at  the  entrance  of  Kiaochow  Bay,  and  on 
November  14;*  he  took  possession  of  the  Bay  and  its 
surrounding  territories  in  the  name  of  the  German 
Emperor.  The  details  of  the  seizure  were  given  in 
The  North  China  Daily  News,  November  29,  1897, 
as  follows : 

"On  Sunday,  the  14th  instant,  at  8  a.  m.,  a  landing  party  was 
sent  ashore  to  take  possession  'of  the  heights  surrounding  the 
bay.  At  the  same  time  the  order  was  given  to  the  Cormorant's 
landing  party,  she  being  farthest  inside  the  bay  and  commanding 
the  passes  to  the  interior,  to  take  the  powder  magazine.  Towards 
9  o'clock  these  points  having  been  secured,  the  Flag-Lieutenant 
was  sent  to  the  Chinese  General  with  an  ultimatum  that  within 
three  hours  he  must  clear  out  of  the  camp.  The  two  ships 
Kaiser  and  Prinzess  Wilhelm  were  so  anchored  outside  of  the 
port  that  they  commanded  the  forts,  the  order  having  been  given 
to  fire  on  the  same  on  a  certain  given  signal.  After  delivery  to 
him  of  the  ultimatum  the  general  withdrew,  as  resistance,  espe- 
cially as  his  aTTmrnmition  had  been  seized,  would  have  been  futile. 
Towards  2  p.  m.,  the  German  flag  was  hoisted  on  the  east  fort; 
the  Admiral  made  a  speech  to  the  crews ;  they  saluted  and  gave 
three  cheers  for  the  Kaiser. " 

China's  humiliation  was  complete.     Thus,  as  the 
North  China  Daily  News  had  put  it,  "a  foreign  power 

•That  is,  thirteen  days  after  the  occurrence  of  the  incident,  and  four 
days  after  it  became  known. 


28  THE  SHANTUNG  QUESTION 

with  three  ships  and  600  men  finds  no  difficulty  in 
effecting  a  descent  on  a  country  of  three  hundred  mil- 
lions and  establishes  herself  without  opposition 
within  three  hundred  and  fifty  miles  of  the  capital." 

With  the  German  forces  in  actual  occupation  of  the 
territory,  the  German  Minister  then  proceeded  to 
negotiate  with  the  Chinese  Government  on  the  mis- 
sionary case.  He  submitted  six  demands,  "  which  he 
insisted  should  be  complied  with  on  the  part  of  China, 
but  he  would  not  say  a  word  as  to  whether  Germany 
would  evacuate  Kiaochow."  These  six  demands 
included  (1)  the  erection  of  a  memorial  tablet  for  the 
dead  priests,  (2)  payment  of  an  indemnity  to  their 
families,  (3)  dismissal  of  the  Governor  of  Shantung 
from  public  service,  (4)  repayment  of  the  expenses 
incurred  in  the  occupation  of  the  territory,  (5)  grant 
to  Germany  the  sole  right  to  construct  railways  and 
open  coal  mines  in  Shantung. 

The  Chinese  Government  was  very  much  per- 
turbed, but  it  managed  to  present  a  "bold  diplomatic 
front."  The  first  two  demands  were  acceded  to;  the 
third  was  not  accepted,  but  an  imperial  decree  was 
issued  which  forbade  Li  Ping-heng,  Governor  of 
Shantung,  to  leave  his  post  until  the  case  was  satis- 
factorily settled.  The  last  three  demands  were 
entirely  rejected. 

On  the  other  hand,  the  German  Government  was 
determined  to  acquire  a  foothold  in  China.  Upon 
the  refusal  by  the  Chinese  Government  to  accede  to 
the  six  demands  in  toto,  "at  once,  reinforcement  of 
ships,  men  and  field  guns  were  sent  out  under  the 
command  of  the  Emperor's  brother,  Admiral  Prince 
Heinrich  of  Prussia."  At  the  farewell  banquet  at 


GERMAN  OCCUPATION  OF  KIAOCHOW  BAY      29 

Hamburg,  December  18,  1897,  the  Kaiser  struck  the 
keynote  of  the  German  spirit,  when  he  said:  "May 
every  one  in  those  distant  regions  be  aware  that  the 
German  Michael  has  firmly  planted  his  shield  with 
the  device  of  the  German  eagle  upon  the  soil  of  China, 
in  order  once  for  all  to  give  his  protection  to  all  who 
ask  for  it."  In  the  very  same  spirit,  he  added: 
"Should  anyone  essay  to  detract  from  our  just  rights 
or  to  injure  us,  then  up  and  at  him  with  your  mailed 
fist."  It  is  thus  evident  that  Germany  was  deter- 
mined to  acquire  a  naval  station  in  China  at  all 
events. 

It  may  be  interesting  to  recall  here  that  in  the 
alleged  Cassini  Convention,  divulged  first  in  the 
North-China  Herald,  March  6,  1896,  and  later  in  the 
London  Times  in  the  fall  of  that  year,  Kiaochow  Bay 
was  mentioned  as  the  first  of  three  ports  which  China 
was  to  lease  to  Russia.  Article  IX  of  the  alleged 
convention  stipulated:  "In  order  to  give  Russia  an 
ice-free  port,  China  leased  Kiaochow  to  Russia  for 
fifteen  years,  but  occupation  was  to  be  deferred  for 
the  present."  The  German  Government  must  have 
been  well  acquainted  with  the  contents  of  the  conven- 
tion, the  premature  publication  of  which  raised  such 
a  furore  in  the  diplomatic  world  that  everybody  hav- 
ing a  hand  in  the  matter  denied  its  existence 
altogether.  With  the  authenticity  of  the  alleged 
convention,  be  it  in  the  form  of  a  treaty  or  of  a 
memorandum,  we  are  here  not  at  all  concerned.  The 
question  of  interest  is :  If  Kiaochow  Bay  had  been 
first  promised  to  Russia,  how  did  Germany  succeed 
in  forcing  a  lease  of  the  bay  from  China  without  the 
slightest  grumbling  from  the  Russian  Government  I 


30  THE  SHANTUNG  QUESTION 

Was  Germany  not  afraid  of  getting  into  serious  com- 
plications with  Russia,  whose  good-will  she  most 
desired  to  cultivate  as  a  valuable  asset  in  playing 
her  part  in  European  politics?  The  picture  of  an 
imperialistic  Germany,  bent  upon  empire-building 
and  territorial  aggrandisement,  with  an  aggressive- 
ness calculated  but  enlightened,  and  with  a  diplomatic 
subtlety  characterised  as  shrewdness  by  some  and 
ridiculed  by  others  as  mere  stupidity,  is  a  picture  that 
can  be  easily  conjured  up  in  the  minds  of  those  who 
have  been  acquainted  with  the  political  history  of 
Germany).  But  it  is  difficult  to  imagine  what  she 
had  actually  done  in  order  to  lease  from  China  the 
territory  which  Russia  had  already  pre-empted,  so 
to  speak.  The  true  story  and  the  diplomatic  back- 
ground of  the  lease  were  known  among  a  few  states- 
men of  Germany  and  Russia  and  remained  until  but 
very  recently  a  secret  to  the  world  at  large.  With 
the  publication  of  the  facts  in  the  case  by  Dr.  E.  J. 
Dillon,  who  is  supported  by  the  veteran  Russian 
statesman,  Count  Witte,  in  his  memoirs,  it  has  become 
known  now  that  the  Kaiser  got  the  assent  of  the  Czar 
first  before  he  sent  out  his  brother,  Prince  Henry  of 
Prussia,  on  the  voyage  of  conquest.  The  complete 
story  is  somewhat  as  follows : 

During  his  first  visit  to  St.  Petersburg  after 
Nicholas'  accession  to  the  throne,  the  Kaiser  was 
driving  home  together  with  the  Czar  in  an  open 
carriage  from  a  review  at  Peterhof .  In  the  course 
of  conversation  between  the  two  potentates,  the 
Kaiser  suddenly  broke  away  from  the  ordinary  topics 
and  exclaimed :  "  I  want  you  to  do  me  a  favour. ' '  He 
said  to  the  Czar :  "  You  are  in  the  happy  position  of 


GERMAN  OCCUPATION  OF  KIAOCHOW  BAY       31 

being  able  to  help  your  friends  as  well  as  to  punish 
your  enemies.    As  you  know,  I  am  badly  in  need  of 
a  port.     My  fleet  has  no  place  worthy  of  the  name 
outside  my  Empire.    And  why  should  it  be  debarred  ? 
That  may,  perhaps,  serve  the  purpose  of  our  covert 
enemies,  but  not  Russia's.  And  I  know  your  friendly 
sentiment  towards  me  and  my  dynasty.    I  want  you 
now  to  say  frankly,  have  you  any  objection  to  my 
leasing  Kiaochow  in  China*?"    uWhat  name  did  you 
say?"  replied  the  Czar,  whose  knowledge  of  the  Far 
Eastern  geography  was  no  better  than  that  of  a 
school    boy.     "Kiaochow,"    repeated    the    Kaiser. 
"No,  none.     I  see  no  objection  whatever,"  quickly 
answered  the  Czar.    With  this  understanding,  the 
royal  pair  drove  back  to  the  palace.     "A  few  hours 
afterwards  the  Emperor  (the  Czar)  met  the  Grand 
Duke  Alexei  Alexandrovitch,  who  knew  a  good  deal 
about  sea-ports  and  their  value,  and  about  naval  mat- 
ters generally.    The  Czar  said,  'I  feel  put  out  with 
the  Kaiser.     To-day  he  had  tricked  me  into  consent- 
ing to  let  him  have  Kiaochow.    Of  course,  it  is  not 
downright  annexation  that  he  aims  at.     He  is  only 
going  to  lease  it.    All  the  same,  it  is  a  nasty  trick!' 
' You  have  not  given  him  your  consent  in  writing?' 
'  No,  no.     Only  in  words.     We  were  in  the  carriage 
driving.'    'But  surely  you  can  withdraw  from  that 
one-sided  arrangement  all  the  more  that  it  would  put 
us  into  a  very  embarrassing  position.'     'No,  no,  I 
have  given  my  word  and  I  cannot  back  out.     It  is 
most  vexing.'  "* 
i 

*  Dr.  E.  J.  Dillon,  The  Eclipse  of  Russia,  pp.  247-249.  It  happened  that 
Count  Mouravieff  was  then  the  Minister  of  Foreign  Affairs,  who  was 
characterised  as  "the  most  ignorant  and  least  cultured  of  all  Russia's 
Foreign  Ministers  in  the  course  of  the  nineteenth  century."  "Mouravieff 


32  THE  SHANTUNG  QUESTIQN 

Indeed,  "it  is  most  vexing."  No  sooner  was  the 
promise  given  than  the  untoward  incident  took  place 
in  China — the  murder  of  two  German  missionaries, 
which  furnished  the  Kaiser  the  desired  opportunity 
to  translate  the  word  into  action,  and  enabled  him, 
by  a  startling  process  of  political  chemistry,  to  turn 
the  blood  of  the  two  missionaries  in  China  into  a 
comfortable  place  under  the  sun.  The  lease  of  Kiao- 
chow  for  ninety-nine  years  was  demanded  from  the 
Tsung-li  Yamen,  as  the  Chinese  Foreign  Office  was  so 
called  then.  As  the  German  soldiers  were  already 
in  possession  of  the  city  and  its  surrounding  terri- 
tory, and  as,  with  Germany,  possession  was  nine 
points  of  law,  there  was  but  one  choice  that  China 
could  make :  to  fight  for  her  territorial  integrity  or 
to  bow  to  the  demands.  Not  being  in  a  position  to 
defend  herself,  and  with  no  assistance  in  sight  from 
any  of  the  foreign  Powers,  China  yielded  one  point 
after  another,  and  finally  acceded  to  the  German 
demands  as  gracefully  as  she  could.  ' i  Considering, ' ' 
to  use  the  language  of  the  memorial  of  the  Tsung-li 
Yamen  to  the  Throne  on  the  subject,  "that  there  has 
never  been  any  disagreement  existing  between  China 
and  Germany,  and  that  the  German  Government 
came  to  the  assistance  of  China  in  securing  the 
evacuation  of  the  Liao-tung  Peninsula  by  the  Japan- 
ese, for  which  she  has  never  been  recompensed ;  and 
further,  as  England,  France,  and  Russia  have  taken 
maritime  ports  in  the  East,  and  as  Germany  has  no 
port  as  a  rendezvous  for  her  vessels  and  for  a  coaling 


probably  had  never  before  heard  of  Kiaochow  and  knew  no  reason  which 
would  militate  against  its  being  leased  to  Germany,  and  like  other  and  more 
gifted  ministers,  he  refrained  from  asking  those  who  knew." 


GERMAN  OCCUPATION  OF  KIAOCHOW  BAY      33 

station,  her  position  is  not  equal  to  the  other  great 
Powers."  For  this  reason,  Kiaochow  was  leased 
to  Germany  for  ninety-nine  years,  with  a  special 
reservation  on  China's  sovereignty  over  the  terri- 
tory, and  a  special  stipulation  that  Germany  was  not 
to  sublet  the  leased  territory  to  any  other  Power. 
The  Convention  was  signed  on  March  6,  1898. 
"  Verily  the  blood  of  martyrs  is  the  seed  of  wicked- 
ness!" "If  one  had  to  select  the  political  crime  of 
modern  history  which  combined  the  maximum  of 
viciousness  with  the  minimum  of  excuse  it  would 
be  this." 


Ill 

GERMANY  IN  SHANTUNG 

THE  convention  between  China  and  Germany, 
signed  at  Peking,  March  6,  1898,  provided  for 
the  lease  for  ninety-nine  years  of  "both  sides 
of  entrance  to  the  bay  of  Kiaochow"  and  ufree  pas- 
sage of  German  troops  in  a  zone  of  50  kilometer  (100 
Chinese  li)  surrounding  the  Bay  of  Kiaochow  at 
high  water. "  It  was  stipulated  that  "  all  rights  of 
sovereignty"  within  the  said  zone  were  reserved  to 
China  herself.  "In  order  to  avoid  the  possibility  of 
conflicts,  the  Imperial  Chinese  Government  will  not 
exercise  rights  of  administration  in  the  leased  terri- 
tory during  the  term  of  the  lease,  but  grants  the 
exercise  of  the  same  to  Germany. ' ' 

The  convention  also  provided  for  the  opening  of 
mines  and  construction  of  railways  by  Germany  in 
the  Shantung  province.  "The  Chinese  Government 
sanctions  the  construction  by  Germany  of  two  lines 
of  railway  in  Shantung.  The  first  will  run  from 
Kiaochow  to  Tsinan  and  the  boundary  of  Shantung 
province  via  Weihsien,  Tsingchow,  Poshan,  Tzech- 
wan  and  Tsowping.  The  second  line  will  connect 
Kiaochow  with  I-chow,  whence  an  extension  will  be 
constructed  to  Tsinan  through  Laiwu-hsien. "  In 
order  to  carry  out  these  schemes,  a  Chino-German 
Railway  Company  was  to  be  organised,  with  joint 
capital  and  under  joint  management.  As  to  the 

34 


GERMANY  IN     SHANTUNG  35 

mines,  it  was  provided  that  Chinese  and  German 
merchants  could  jointly  operate  them,  within  30  li 
of  the  railway  lines  to  be  built.  On  March  31,  1900, 
an  agreement  was  reached  between  China  and  Ger- 
many about  the  organisation  of  a  Chino-German 
Railway  Company  for  the  construction  of  the  above 
mentioned  lines.* 

An  agreement  concerning  the  establishment  of  a 
maritime  customs  office  at  Tsingtao  was  signed  at 
Peking,  April  17, 1899,  by  Baron  Heyking  on  behalf 
of  Germany,  and  Robert  Hart  on  behalf  of  Chinai. 
It  was  stipulated  that  the  Commissioner  or  the  Chief 
of  the  Maritime  Customs  Office  at  Tsingtao  was  to 
be  of  German  nationality,  to  be  appointed  with  the 
approval  of  the  German  Minister  in  Peking ;  that  the 
members  of  the  European  staff  of  the  office  should, 
as  a  ride,  be  of  German  nationality,  although  other 
nationals  might  be  employed  to  fill  temporary 
vacancy;  and  that  merchandise  brought  by  sea  to 
Tsingtao  was  free  of  duty,  but  the  conventional  five 
per  cent,  of  duty  would  be  levied  on  all  merchandise 
or  products  passing  the  German  frontier  of  Kiao- 
chow  into  the  interior  of  China.  Among  other 
things,  the  agreement  also  provided  that  the  language 
of  official  correspondence  should  preferably  be  Ger- 
man; that  the  Inspector  General  of  Maritime  Cus- 
toms would  inform  the  Governor  of  Kiaochow  about 
all  changes  in  the  staff  of  the  Customs  Office;  and 
that  the  Office  at  Tsingtao  should  take  charge  of  the 
collection  of  duties,  taxes,  or  likin  on  all  Chinese-built 
vessels  (junks)  coming  to  Tsingtao  or  to  other  places 
in  the  bay  of  Kiaochow  and  on  all  merchandise 

*  Vide  Appendix  B,  and  Chapter  XIII. 


36  THE  SHANTUNG  QUESTION 

brought  in  such  vessels.  As  a  result  of  this  agree- 
ment, the  Maritime  Customs  House  at  Tsingtao  was 
opened  on  July  1,  1899. 

The  above  agreement  was,  of  course,  provisional 
in  character.  On  April  17, 1904,  an  additional  agree- 
ment was  entered  into  for  the  purpose  of  regulating 
steam  navigation  in  inland  waters.  On  December  1, 
1905,  an  amendment  to  the  agreement  of  1899  was 
made.  It  provided  that  after  the  delimitation  of  the 
Tsingtao  free  area  by  Germany,  the  Chinese  Mari- 
time Customs  Office  established  in  the  leased  territory 
would  levy  all  the  duties  payable  on  goods  passing 
outside  the  free  area,  and  the  Chinese  Government 
would  hand  over  annually  to  the  German  officials  at 
Tsingtao  20  per  cent,  of  the  net  Import  Duties  col- 
lected, as  shown  by  the  statistics  of  Kiaochow  Cus- 
toms, as  its  contribution  to  the  expenses  of  the 
territory.* 

On  November  28,  1905,  China  and  Germany 
entered  into  another  convention,  whereby  the  latter 
undertook  to  withdraw  her  troops  from  Kiaochow 
and  Kaomi.  Article  III  reads:  "From  the  date 
of  the  signing  of  this  Convention,  no  matter  whether 
the  German  troops  at  Kiaochow  and  Kaomi  have 
completely  withdrawn  or  not,  the  railways  within 
the  surrounding  zone  shall  completely  be  under  the 
supervision  and  protection  of  the  Chinese  local 
authorities  and  police  officers." 

For  the  purpose  of  defining  the  mining  area  of  the 
Chino-German  Company  along  the  railway  lines  in 
Shantung  province,  a  working  arrangement  was 

*  For  the  texts  of  these  customs  conventions,  vide  John  V.  A.  MacMurray, 
Treaties  and  Agreements  with  and  concerning  China,  1894-1919,  Vol  I, 
pp.  189-203. 


GERMANY  IN     SHANTUNG  37 

concluded  on  July  24,  1911,  between  the  Shantung 
Mining  Company  and  the  authorities  of  the  province. 
The  Fangtze  and  Tzechwan  mining  areas  and  the 
mining  district  from  Chinlingchen  along  the  Kiao- 
chow-Tsinan  Railway  in  a  northerly  direction  for  a 
distance  of  30  li  to  Changtien  were  reserved  for  the 
" exclusive  exploitation"  of  the  Company. 

By  an  exchange  of  notes  between  the  German 
Minister  in  Peking  and  the  Chinese  Minister  of  For- 
eign Affairs,  December  31,  1913,  an  understanding 
was  reached  for  the  construction  of  two  Government 
railways,  one  from  Kaomi  to  Hanchuang,  there  con- 
necting with  the  Tientsin-Pukow  Railway,  and  the 
other  from  Tsinanfu  to  a  place  between  Shuntehfu 
and  Hsin-hsiang-hsien  to  link  up  with  the  Peking- 
Hankow  Railway.  The  final  agreement  concerning 
these  lines  was  said  to  have  been  reached  on  June  24, 
1914.  The  outbreak  of  war  in  Europe  in  less  than 
two  months  later  made  it  impossible,  of  course,  for 
Germany  to  make  use  of  these  concessions. 

It  is  thus  seen  that,  with  Kiaochow  as  her  point 
d'appui,  Germany  soon  extended  her  influence  and 
interest  throughout  the  entire  province  of  Shantung. 
In  fact,  Shantung  as  a  German  sphere  of  interest  was 
recognised  as  early  as  April  20,  1898,  when  Great 
Britain,  after  her  occupation  of  Wei-hai-wei,  de- 
clared to  Germany:  "In  establishing  herself  at 
Wei-hai-wei,  she  has  no  intention  of  injuring  or  con- 
testing the  rights  and  interests  of  Germany  in  the 
province  of  Shantung,  or  of  creating  difficulties  for 
her  in  that  province.  It  is  especially  understood  that 
England  will  not  construct  any  railroad  communica- 
tion from  Wei-hai-wei  and  the  district  leased  there- 


38  THE  SHANTUNG  QUESTION 

with  into  the  interior  of  the  province  of  Shantung." 
This  declaration  had  but  one  practical  effect — the 
recognition  of  Shantung  as  a  German  sphere  of 
interest.  This  recognition  was  strengthened  by  the 
Anglo-German  railway  understanding  of  September 
2,  1898,  whereby  the  Yangtze  Valley  was  recognised 
as  British,  and  the  Shantung  province  as  German 
sphere  of  interest. 

It  may  be  recalled  that,  in  the  lease  convention  of 
March  6,  1898,  there  was  one  stipulation  which, 
according  to  its  language,  seemed  to  reserve  for  Ger- 
many the  exclusive  right  of  developing  the  province. 
It  reads : 

"If  within  the  province  of  Shantung  any  matters  are  under- 
taken for  which  foreign  assistance,  whether  in  personnel,  or  in 
capital,  or  in  material,  is  invited,  China  agrees  that  the  German 
merchants  concerned  shall  first  be  asked  whether  they  wish  to 
undertake  the  works  and  provide  the  materials.  In  case  the 
German  merchants  do  not  wish  to  undertake  the  said  works  and 
provide  the  materials,  then  as  a  matter  of  fairness  China  will 
be  free  to  make  such  other  arrangements  as  suits  her  conven- 


This  provision  savoured  too  much  of  exclusive 
privilege  for  Germany.  Upon  inquiry  by  the  United 
States  as  to  the  construction  to  be  placed  upon  this 
stipulation,  the  German  Foreign  Office,  under  date 
of  April  19, 1902,  addressed  to  the  American  Embassy 
in  Berlin  a  memorandum  on  the  subject,  in  which  it 
was  said : 

"The  foregoing  provisions  do  not  grant  any  exclusive  rights  to 
Germany,  they  merely  bind  China  to  offer  the  works  and  schemes 
concerned  to  Germans,  but  leave  to  persons  of  other  nationality 
absolute  freedom  to  obtain  the  contracts  for  the  furnishing  of 
material  by  offering  more  favourable  terms.  The  Imperial  Gov- 


GERMANY  IN     SHANTUNG  39 

ernment  has  as  yet  not  learned  of  any  instance  where  Americans 
or  any  persons  of  any  other  nationality  have  actually  been  placed 
at  disadvantage  through  the  application  of  these  provisions." 

To  go  back  about  two  years,  we  have  the  actual 
promise  by  Germany  of  keeping  the  door  open  in 
Shantung.  On  January  24,  1900,  Mr.  Andrew  D. 
White,  American  Ambassador  at  Berlin,  presented 
to  the  German  Government  the  famous  Open  Door 
circular.  In  its  reply  to  this  circular,  February  19, 
it  declared : 

"The  Imperial  Government  has,  from  the  beginning,  not  only 
asserted,  but  also  practically  carried  out  to  the  fullest  extent, 
in  its  Chinese  possessions  absolute  equality  of  treatment  of  all 
nations  with  regard  to  trade,  navigation,  and  commerce.  The 
Imperial  Government  entertains  no  thought  of  departing  in  the 
future  from  this  principle,  which  at  once  excludes  any  prejudi- 
cial or  disadvantageous  commercial  treatment  of  the  citizens 
of  the  United  States  of  America,  so  long  as  it  is  not  forced  to  do 
so,  on  account  of  considerations  of  reciprocity,  by  a  divergence 
from  it  by  other  governments." 


IV 

THE  FALL  OF  TSINGTAO 

THE  outbreak  of  war  in  Europe  in  August, 
1914,  had  a  significant  bearing  upon  the  politi- 
cal situation  in  the  Far  East,  which  was  keenly 
appreciated  by  the  statesmen  at  the  helm  of  the 
Chinese  ship  of  state  and  by  those  careful  students 
of  the  aims  and  methods  of  Japanese  foreign  policy. 
To  say  the  least,  the  war  marked  not  only  the  begin- 
ning of  the  downfall  of  the  German  Empire  in 
Europe,  but  also  the  end  of  the  German  regime  in 
the  Far  East.  And  this  end  was  greatly  hastened  by 
the  participation  by  Japan  in  the  conflict. 

In  order  to  understand  the  full  significance  of  the 
German  "  devolution "  in  China,  we  must  understand 
first  of  all  the  diplomatic  background  which  lay 
behind  it. 

In  the  Far  East,  as  in  Europe,  the  political  align- 
ment of  the  different  Powers  was  so  complicated  that 
anything  that  might  happen  to  one  was  bound  to 
react  upon  all.  It  is  necessary  to  remember  that 
China,  ever  since  the  Chino- Japanese  war  of  1894-5, 
has  been  the  political  nerve  centre  of  the  Far  East, 
and  anything  that  happens  to  tip  the  balance  of 
power  of  Europe  often  reacts,  directly  or  indirectly, 
upon  the  positions  of  the  European  Powers  in  China. 
This  is  largely  because  of  the  fact  that  Russia,  Great 
Britain,  Germany,  and  France  have  had  in  China 

40 


THE  FALL  OF  TSINGTAO  41 

not  only  economic  and  commercial  interests  which 
may  count  for  little  or  much  according  as  what  they 
are,  but  also  territorial  possessions  which  are  invalu- 
able pawns  in  international  conflicts.  This  is  also 
because  of  the  fact  that  Japan,  who  has  been  bent 
upon  territorial  expansion  on  the  Asiatic  continent 
ever  since  her  entrance  into  the  comity  of  nations,  has 
allied  herself  with  Great  Britain  and  has  entered 
into  a  number  of  agreements  with  the  United  States 
and  the  European  Powers  on  the  Open  Door  policy 
in  China.  The  intimate  inter-relation  of  the  Par 
East,  Europe,  and  America  results  in  the  reaction  of 
international  politics  of  one  continent  upon  another. 
As  far  as  China  is  concerned,  she  has  but  to  confess 
that  her  political  impotence  invites  humiliation  and 
her  military  weakness  encourages  foreign  aggression. 
In  the  game  of  international  politics  she  plays  no  part 
so  far — except,  perhaps,  that  of  a  victim. 

The  commencement  of  armed  hostilities  between 
Russia  and  Austria-Hungary  in  August,  1914,  which 
finally  involved  all  the  great  Powers  in  Europe  and 
spread  into  all  corners  of  the  globe,  was  viewed  with 
great  apprehension  by  the  Chinese  Government. 
With  the  participation  of  Germany  and  Great 
Britain  in  the  conflict,  it  ceased,  it  was  soon  realised, 
to  be  an  exclusively  European  matter,  and  took  on  the 
colour  of  a  world  affair.  The  fact  that  Japan  has  had 
a  defensive  and  offensive  alliance  with  Great  Britain, 
and  the  fact  that  the  principal  belligerents  of  the 
war  have  had  territorial  possessions  in  the  Orient  in 
general  and  in  China  in  particular  made  it  a  certainty 
that  the  spark  which  caused  the  European  conflagra- 
tion was  to  be  reflected  in  the  Far  East.  China  was 


42  THE  SHANTUNG  QUESTION 

particularly  apprehensive  for  the  simple  reason  that 
her  territory  would  be  made  the  battleground  on 
which  the  hostile  groups  were  to  measure  their  respec- 
tive strength.  This  had  happened  during  the  Russo- 
Japanese  war,  which  was  fought  largely  in  Man- 
churia where  Russia  had  the  leased  territory  from 
China,  the  Liaotung  peninsula.  The  result  was  that 
China,  as  a  benevolent  neutral,  was  made  to  suffer 
the  devastation  of  her  territory  and  the  destruction 
of  the  properties  of  her  people.  Now,  should  the 
European  war  in  1914  be  brought  to  the  Far  East, 
as  it  was,  China  was  certain  that  she  would  be  again 
subject  to  the  burdens  and  liabilities  of  an  armed 
conflict  and  that  the  leased  territories  which  have 
been  held  by  the  principal  belligerent  Powers  would 
be  made  the  scene  of  military  operations.  At  the 
outbreak  of  the  war,  Great  Britain  had  Hongkong, 
Kowloon,  and  Wei-hai-wei  in  China;  France, 
Kwang-chow-wan ;  Japan,  Ta-lien-wan  and  Port 
Arthur ;  and  Germany,  the  Kiaochow  Bay,  not  taking 
into  account  the  number  of  settlements  and  conces- 
sions which  the  different  Powers  have  had  in  a  few 
of  the  treaty  ports  in  China.  The  grouping  of  the 
European  Powers  at  the  time  was  such  that  one  could 
easily  see  that  it  was  not  likely  that  Germany  would 
dare  to  attack  her  enemy  holdings  in  China.  On 
the  very  contrary,  the  allied  Powers,  in  view  of  their 
numerical  strength  and  with  the  help  of  Japan,  would 
be  tempted  to  wrestle  with  the  German  stronghold  in 
Shantung.  This,  as  the  later  events  have  proved, 
turned  out  to  be  the  case. 

At  the  same  time  there  were  ample  indications  that 
Japan  was  prepared  to  take  part  in  the  conflict.     A 


THE  FALL  OF  TSINGTAO  43 

few  days  after  hostilities  had  commenced  in  Europe, 
Baron  Kato,  then  Japanese  Minister  of  Foreign 
Affairs,  announced  in  the  Diet  that  Japan  was  quite 
ready  to  assume  her  obligations  under  the  Anglo- 
Japanese  alliance.  Of  course,  a  strict  interpretation 
of  the  published  terms  of  the  alliance  would  not  war- 
rant the  belief  that  Japan  would  be  called  upon  to 
participate  in  the  war.  As  no  one,  however,  knew 
exactly  what  the  mutual  obligations  of  Japan  and 
Great  Britain  were  under  the  alliance,  except  the 
British  and  Japanese  Governments,  it  may  be  safely 
stated  that  Baron  Kato's  utterance  in  the  Diet  was 
ominous.  It  was  quite  sufficient  to  cause  a  flutter 
among  the  diplomatic  circles  in  Peking  and  Tokio. 
Coupled  with  the  understanding  that  Japan  was  just 
then  eagerly  looking  for  an  opportunity  to  carry^  out 
her  imperialistic  designs  in  China  and  that  the  war 
in  Europe  would  furnish  the  desired  opportunity,  the 
readiness  the  Japanese  Government  showed  then  for 
active  participation  in  the  struggle  could  not  but  be 
viewed  with  serious  misgivings. 

Apprehensive  of  the  serious  consequences  of  inter- 
vention by  Japan,  which  would  surely  set  in  motion 
the  sinister  forces  that  have  in  the  last  twenty  years 
or  so  been  the  determinative  factors  of  Far  Eastern 
politics,  the  Chinese  Government  made  every  possible 
effort  to  save  China  from  being  dragged  into  the 
whirlpool  of  European  hostilities.  The  proper  thing 
to  do — indeed,  the  very  first  step  which  the  Chinese 
Government  took — was  to  declare  her  neutrality  on 
August  6,  1914.  It  was  very  unfortunate,  however, 
that  China's  neutrality  could  command  no  greater 
respect  by  the  Powers  than  her  territorial  integrity 


44  THE  SHANTUNG  QUESTION 

which  they  all  engaged  to  maintain.  China  was  a 
neutral  country  during  the  Russo-Japanese  war ;  but 
her  neutrality  was  violated,  her  territory  was 
invaded,  and  South  Manchuria  was  made  the  battle- 
ground by  the  two  belligerents,  in  spite  of  the  general 
rules  of  International  Law  and  in  spite  of  the  specific 
provisions  of  the  Hague  Conventions  of  1899,  of 
which  both  Japan  and  Russia  were  the  original  signa- 
tory Powers.  With  this  experience  in  mind,  and 
remembering  the  direct  consequences  which  its 
nationals  had  suffered  in  1904-5,  the  Chinese  Govern- 
ment was  anxious  to  see  that  the  belligerent  Powers 
would  undertake  to  respect  China's  neutrality  in 
case  the  European  war  should  be  brought  to  the  Par 
Bast.  Japan  and  the  United  States  (both  Japan 
and  the  United  States  were  then  neutral  countries 
and  presumably  free  to  respond)  were  approached 
by  the  Chinese  Government  with  the  request  that  they 
both  would  use  their  good  offices  to  obtain  the  consent 
from  all  the  belligerent  Powers  to  respect  and  pre- 
serve the  neutrality  of  China,  particularly  the 
neutrality  of  all  Chinese  territories  leased  to  the  for- 
eign Powers.  In  the  meantime,  Germany  made  over- 
tures as  to  a  temporary  restoration  of  the  Kiaochow 
leased  territory,  but  with  conditions  which  were 
entirely  unacceptable  to  the  Chinese  Government.* 


*  Apropos  of  Germany's  proposal  of  restoring  Kiaochow  Bay  to  China, 
a  Japanese  writer  has  this  to  say:  "The  Japanese  press  is  in  all  probability 
right  when  it  says  that  Japan  and  England  were  obliged  to  act  promptly 
in  order  to  frustrate  Germany's  scheme  to  transfer  Kiaochow  to  the 
Chinese  Government  before  she  was  compelled  to  hand  it  over  to  Japan. 
Had  Germany  succeeded  in  carrying  out  this  scheme  she  would  still  have 
enjoyed,  in  virtue  of  Article  V  of  Kiaochow  convention  of  1898,  the 
privilege  of  securing  in  some  future  time  'a  more  suitable  territory'  in 
China.  This  was  exactly  the  condition  which  the  allies  did  not  want 
established  in  China." 


THE  FALL  OF  TSINGTAO  45 

It  remains  yet  unknown  just  what  effort  the  United 
States  had  made  in  response  to  the  request  of  the 
Chinese  Government,  towards  securing  the  consent  of 
the  belligerent  Powers  to  respect  China's  neutrality. 
It  has  been  a  matter  of  common  knowledge,  however, 
that  Japan  was  not  in  favour  of  the  move,  although 
she  appeared  at  the  time  to  be  very  anxious  about  the 
territorial  integrity  of  her  neighbour  and  willing 
to  meet  China's  wishes. 

All  efforts  proved  to  be  in  vain,  and  all  hopes  for 
the  preservation  of  China's  neutrality  were  banished 
when,  on  August  15,  1914,  Japan  delivered  her  ulti- 
matum to  Germany.  The  sequence  of  events  which 
led  to  Japan's  entrance  in  the  war  is  like  this.  On 
August  3,  the  day  before  Great  Britain  declared  war 
upon  Germany,  Sir  Cunyngham  Greene,  then  British 
Ambassador  at  Tokio,  informed  the  Japanese  Gov- 
ernment that  Great  Britain  was  compelled  to  join 
hands  with  France  and  Belgium  and  desired  to  ascer- 
tain "  whether  Japan  would  aid  England  in  the  event 
of  British  interests  in  the  Far  East  being  jeopardised 
by  German  activities."  On  August  4,  the  British 
envoy  was  told  by  Baron  Kato,  the  Japanese  Foreign 
Minister,  that  "  Japan  would  not  evade  the  responsi- 
bilities which  she  had  assumed  in  entering  into 
alliance  with  England."  On  August  7,  the  British 
Ambassador  again  interviewed  Baron  Kato  and  told 
him  that  "the  situation  had  developed  in  such  a 
manner  as  would  oblige  Japan's  immediate  entrance 
upon  the  war."  The  result  of  this  request  was  the 
despatch  of  the  ultimatum  to  Germany  on  August  15, 
calling  upon  the  latter  to  withdraw  her  men-of-war 
and  armed  vessels  of  all  kinds  from  the  Far  Eastern 


46  THE  SHANTUNG  QUESTION 

waters  and  "to  deliver  on  a  date  not  later  than  Sep- 
tember 15  to  the  Imperial  Japanese  Government, 
without  condition  or  compensation,  the  entire  leased 
territory  of  Kiaochow,  with  a  view  to  the  eventual 
restoration  of  the  same  to  China."  The  Japanese 
Government  believed  it  to  be  "its  duty  to  give  the 
advice  to  the  Imperial  German  Government  to  carry 
out"  these  propositions,  for,  "in  the  event  of  not 
receiving  by  noon  on  August  23, 1914,  an  answer  from 
the  Imperial  German  Government  signifying  its  con- 
ditional acceptance  of  the  above  advice  offered  by  the 
Imperial  Japanese  Government,  Japan  will  be  com- 
pelled to  take  such  action  as  she  may  deem  necessary 
to  meet  the  situation. ' '  It  was  tacitly  understood,  or 
at  least  assumed,  that  Japan  sent  this  ultimatum  to 
Germany  only  in  response  to  the  request  for  help  by 
Great  Britain  and  after  due  consultation  with  her 
ally.  As  a  matter  of  fact,  Great  Britain  did  not  ask 
for  anything  more  than  Japan's  assistance  in  protect- 
ing the  British  shipping  in  the  Pacific.* 

Japan's  precipitate  "advice"  to  Germany  caused 
as  much  alarm  in  the  United  States  as  it  did  in  China. 
Some  step  must  be  taken  to  counteract  this  evil  effect. 
Thus,  on  the  day  her  ultimatum  was  delivered  to  Ger- 
many, Count  Okuma,  then  Premier  of  Japan,  sent 
the  following  telegram  to  be  distributed  to  the  press 
in  the  United  States:  "Japan's  proximity  to  China 
breeds  many  absurd  rumours;  but  I  declare  that 

*  The  following  announcement  of  Japan's  intentions  and  her  naval 
activities  was  given  to  the  Department  of  State  by  the  British  Government; 
"It  is  understood  that  the  action  of  Japan  will  not  extend  to  the  Pacific 
beyond  the  China  seas,  except  as  may  be  necessary  to  protect  Japanese 
shipping  lines  in  the  Pacific,  nor  in  Asiatic  waters  westward  of  the  China 
seas,  nor  in  foreign  territories  except  territory  in  German  occupation  on 
the  Continent  of  Asia." 


THE  FALL  OF  TSINGTAO  47 

Japan  acts  with  a  clear  conscience,  in  conformity 
with  justice,  and  in  perfect  accord  with  her  ally. 
Japan  has  no  territorial  ambition,  and  hopes  to  stand 
as  the  protector  of  peace  in  the  Orient/'  Three  days 
later,  on  August  18,  the  same  venerable  Japanese 
statesman  gave  this  explicit  assurance,  which  was 
evidently  meant  for  American  consumption.  Ad- 
dressing a  gathering  of  Japanese  business  men  at 
Tokio,  he  said:  " Japan's  warlike  operations  will 
not  extend  beyond  the  limits  necessary  for  the  attain- 
ment of  the  object  of  the  defence  of  her  own  legiti- 
mate interests.  The  Imperial  Government  will  take 
no  such  action  as  could  give  to  a  third  party  any  cause 
for  anxiety  or  uneasiness  regarding  the  safety  of 
their  territories  or  possessions." 

But  this  was  not  all.  On  August  24,  Count  Okuma 
cabled  the  following  message  to  the  American  public 
through  the  New  York  Independent : 

"I  gladly  seize  the  opportunity  to  send,  through  the  medium 
of  the  Independent,  a  message  to  the  people  of  the  United  States, 
who  have  always  been  helpful  and  loyal  friends  of  Japan.  It  is 
my  desire  to  convince  your  people  of  the  sincerity  of  my  Govern- 
ment and  of  my  people  in  all  their  utterances  and  assurances 
connected  with  the  present  regrettable  situation  in  Europe  and 
the  Far  East.  Every  sense  of  loyalty  and  honour  oblige  Japan 
to  co-operate  with  Great  Britain  to  clear  from  these  waters  the 
enemies  who  in  the  past,  the  present  and  the  future  menace 
her  interests,  her  trade,  her  shipping,  and  her  people's  lives. 
The  Far  Eastern  situation  is  not  of  our  seeking.  It  was  ever 
my  desire  to  maintain  peace,  as  will  be  amply  proved ;  as  Presi- 
dent of  the  Peace  Society  of  Japan  I  have  consistently  so 
endeavoured.  I  have  read  with  admiration  the  lofty  message 
of  President  Wilson  to  his  people  on  the  subject  of  neutrality. 
We,  of  Japan,  are  appreciative  of  the  spirit  and  motives  that 
prompted  the  head  of  your  great  nation,  and  we  feel  confident 
that  his  message  will  meet  with  a  national  response. 


48  THE  SHANTUNG  QUESTION 

"As  Premier  of  Japan,  I  have  stated  and  I  now  again  state 
to  the  people  of  America  and  of  the  world  that  Japan  has  no 
ulterior  motive,  no  desire  to  secure  more  territory,  no  thought  of 
depriving  China  or  other  peoples  of  anything  which  they  now 
possess.  My  Government  and  my  people  have  given  their  word 
and  their  pledge,  which  will  be  as  honourably  kept  as  Japan 
always  keeps  promises." 

On  the  other  hand,  Germany  refused  to  take  the 
Japanese  *  '  advice. ' '  The  ultimatum  was  deliberately 
ignored,  and  it  was  permitted  to  expire  without  reply 
or  comment  from  the  Wilhelmstrasse.  On  August 
23,  the  Imperial  Rescript  was  issued  by  the  Mikado 
declaring  war  upon  Germany.  As  soon  as  the  Japan- 
ese troops  were  ready  to  land,  Japan  informed  the 
Chinese  Government  of  her  intention  to  cross  the 
Chinese  territory  outside  of  the  leased  territory  of 
Kiaochow  in  order  to  attack  Tsingtao  stronghold. 
Without  waiting  for  the  consent  of  the  Chinese  Gov- 
ernment, Japanese  troops  landed  at  Lungkow,  about 
150  miles  outside  of  the  leased  territory.  Germany 
protested  to  China  against  this  wanton  violation  of 
her  neutrality  by  Japan,  and  in  turn,  China  protested 
to  Japan  for  landing  the  troops  on  Chinese  territory. 
From  the  Japanese  viewpoint,  all  these  protests  were 
not  worth  the  paper  they  were  written  on.  Japan,  in 
spite  of  the  solemn  declaration  in  the  Imperial 
Rescript  that  she  was  to  attain  her  "  national  aim 
within  the  limit  of  the  law  of  nations, "  trampled 
every  rule  of  International  Law  in  regard  to  the 
neutral  rights  and  disregarded  all  the  conventional 
duties  of  a  belligerent.  Japanese  troops  began  to 
land  at  all  convenient  points  in  Shantung,  regardless 
of  China's  territorial  sovereignty,  and  not  infre- 
quently they  made  detours  in  order  to  occupy  impor- 


THE  FALL  OF  TSINGTAO  49 

tant  Chinese  towns  and  cities.  Wherever  they 
passed,  they  left  nothing  but  evidences  of  pillage  and 
deprivation.  They  assumed  control  of  the  country, 
all  the  means  of  communication,  posts,  telephones, 
telegraphs,  and  railways;  and  what  was  still  more 
serious,  they  subjected  the  native  Chinese  to  many 
hardships,  indignities,  and  in  many  cases,  outrages. 
Anxious  of  the  situation  thus  caused  by  Japan's 
military  operations  in  Shantung,  Great  Britain  des- 
patched a  small  contingent  of  her  forces  in  China  to 
participate  in  the  attack,  with  the  apparent  purpose 
of  checking  the  wanton  conduct  of  her  ally.  The 
Chinese  Government  was  also  anxious  to  limit 
Japan's  operations  to  the  smallest  possible  area,  so 
that  her  people  would  not  be  subjected  to  the  miseries 
of  war.  The  result  was  the  creation,  on  September 
3,  1914,  by  the  Chinese  Government  of  a  special  war 
zone  in  which  the  belligerents  could  carry  on  their 
military  operations. 

It  is  important  to  remember  that  this  special  war 
zone  was  sui  generis,  based  though  it  was  on  a  similar 
situation  in  the  Eusso- Japanese  war.  Viewed  from 
the  standpoint  of  strict  neutrality,  the  creation  of  the 
zone  was  admittedly  an  anomaly.  But  between  the 
complete  desolation  of  the  Shantung  province  by 
suffering  Japanese  troops  to  continue  their  ravaging 
and  deviating  from  strict  observance  of  Chinese 
neutrality,  that  is,  between  two  evils,  China  decided 
to  choose  the  lesser.  Under  the  existing  circum- 
stances then,  China  was  helpless  either  to  avert  the 
calamity  by  enforcing  her  neutrality  or  to  resist 
Japanese  encroachment.  Failing  both,  the  next  best 
thing  to  do  was  to  set  a  territorial  limit  within  which 


50  THE  SHANTUNG  QUESTION 

the  Anglo-Japanese  forces  could  carry  on  their 
belligerent  operations  against  the  Germans  in 
Tsingtao.  There  was  nothing  done  by  the  British 
forces  which  could  be  pointed  out  as  violation  of 
China's  neutrality  or  as  evidence  of  bad  conduct. 
In  fact,  the  small  contingent  of  the  British  force  was 
landed,  September  23,  1914,  at  Lao-shan-wan,  inside 
the  German  leased  territory, — a  fact  which  the  Lon- 
don Times  observed  as  "  avoiding  the  breach  of 
neutrality  alleged  by  the  Chinese  against  the  Japan- 
ese/' While  on  the  other  hand,  "the  Japanese  took 
round-about  routes,  violating  China's  neutrality, 
without  having  a  real  military  necessity  to  do  so." 

This  special  war  zone  was,  of  course,  created  with 
the  fervent  hope  that  Japan  would  confine  her  forces 
and  attacks  therein.  During  the  Russo-Japanese 
war,  it  will  be  recalled,  a  similar  war  zone  was 
created  so  as  to  limit  the  belligerent  operation  to  the 
part  of  South  Manchuria  lying  east  of  the  Liao  River. 
The  good  offices  of  the  United  States  were  called  upon 
to  secure  the  assent  of  Russia  and  Japan,  and  the 
recognition  of  the  other  Powers,  of  the  war  zone  in 
South  Manchuria ;  and,  on  the  whole,  the  delimitation 
was  well  respected  by  the  belligerents  throughout  the 
war.  Now,  with  respect  to  the  Tsingtao  expedition, 
Japan  first  evaded,  and  then  rejected,  the  proposal 
of  the  Chinese  Government  to  establish  a  definite 
and  restricted  military  area  in  the  Shantung 
province.  When  the  Japanese  Government  was 
formally  notified  of  the  creation  of  the  war  zone,  it 
took  no  more  notice  of  it  than  the  vain  protests  which 
the  Chinese  Government  had  made  in  regard  to  the 
conduct  of  the  Japanese  troops.  Under  the  pretext 


THE  FALL  OF  TSINGTAO  51 

of  " military  necessity,"  they  invaded  practically  the 
entire  province.  In  the  middle  of  September,  they 
arrived  at  Tsimo;  about  September  20,  they  occu- 
pied Wei-hsien  and  took  possession  of  the  railway; 
on  September  27,  China  protested  against  this  viola- 
tion of  her  territorial  sovereignty  and  demanded  uthe 
withdrawal  of  the  troops  and  the  restoration  of  the 
railway  stations."  On  September  28,  the  Japanese 
Minister  in  Peking  informed  the  Chinese  Govern- 
ment that  the  Japanese  forces  would  soon  take 
possession  of  the  Shantung  (the  Kiaochow-Tsinan) 
Railway.  Two  days  later,  the  Chinese  Government 
formally  protested  against  this  threat.*  The  threat 
was  soon  carried  out,  for  Japanese  forces  seized,  in 
spite  of  the  most  vigorous  protest  from  China,  the 
Shantung  Railway,  running  from  Tsingtao  to 
Tsinanfu  of  265  miles.  Japanese  headquarters  were 
established  in  all  the  important  towns  and  cities  along 
the  railway,  and  the  number  of  mines  which  were 
being  worked  by  Chinese  and  German  concerns  were 
taken  over  by  Japanese  authorities.  A  little  later, 
when  the  war  was  won  and  when  the  Germans  were 
entirely  driven  out,  Japan  went  even  so  far  as  to 
establish  civil  administration,  not  only  at  Tsingtao, 
the  captured  stronghold,  but  also  at  Tsinanfu,  the 
capital  of  Shantung,  and  at  many  other  cities  where 
the  Japanese  troops  had  no  right  to  be.  Japan's 
entire  conduct  in  Shantung  was,  therefore,  one  of 
deliberate  violation  of  China's  neutrality,  aggravated 
by  a  sinister  disregard  of  her  territorial  sovereignty. 
We  notice  that  Japan  declared  war  upon  Germany 
on  August  23,  1914;  and  on  September  2,  Japanese 

*  For  diplomatic  correspondence  on  the  subject,  vide  Appendix  F. 


52  THE  SHANTUNG  QUESTION 

forces  began  to  arrive  at  the  scene  of  military  opera- 
tion. On  September  12,  the  first  engagement  took 
place  at  Tsimo,  about  ninety  miles  from  Lungkow, 
where  Japanese  forces  landed.  On  September  18, 
another  engagement  took  place  at  Laoshan  Bay. 
Five  days  later,  the  British  expeditionary  forces 
were  landed  at  Laoshan  Bay  to  assist  in  the  bombard- 
ing of  the  city  of  Tsingtao,  under  the  command  of 
Major-General  Barnardiston.  As  the  fortress  was 
garrisoned  by  only  a  few  thousand  German  and 
Austrian  regulars  and  reservists  hastily  assembled, 
entirely  cut  off  from  outside  help,  its  resistance 
against  the  combined  force  of  Japan  and  Great 
Britain  was  hopeless.  On  November  7,  the  city 
capitulated.  The  Anglo- Japanese  forces  made  their 
triumphant  march  on  November  16,  while  the  Ger- 
man and  Austrian  prisoners  of  war  were  taken  to 
Japan.  The  war  in  the  Far  East,  which  was  precipi- 
tated by  Japan's  friendly  " advice"  to  Germany  on 
August  15,  was  thus  brought  to  a  successful  end — 
successful,  in  the  sense  that  the  war  was  won  by 
Japan,  even  at  the  sacrifice  of  the  established  rules 
of  International  Law,  the  neutrality  and  the  terri- 
torial sovereignty  of  China.  To-day  Tsingtao  has 
become  to  all  intente  and  purposes  a  Japanese  city. 
The  Diederich  Stein,  which  was  meant  to  be  the 
monument  of  the  German  Empire  in  the  Far  East, 
still  remains,  but  over  the  original  German  inscrip- 
tion there  has  been  covered  in  Japanese  the  date  and 
the  circumstance  of  the  Japanese  occupation  of  the 
spot.  The  Kaiser  Wilhelm  Strasse  and  the  other 
"strasses"  have  been  converted  into  "mechis"  and 
"doris." 


THE  FALL  OF  TSINGTAO  53 

It  remains  now  to  refer  to  two  points  in  order  to 
make  the  story  of  the  fall  of  Tsingtao  complete.  The 
first  is  the  total  list  of  Japanese  casualties  in  the 
Tsingtao  expedition.  In  the  land  operations  Japan 
had  a  total  of  12  officers  killed  and  40  wounded,  and 
324  rank  and  file  killed,  and  1,148  wounded.  In  the 
naval  operations  one  small  cruiser  was  sunk  by  a 
mine,  and  280  of  the  crew  perished.  In  addition  to 
this  loss,  the  Japanese  navy  had  40  men  killed  and 
wounded.  The  second  is  the  abolition  of  the  special 
war  zone,  on  January  5, 1915,  which  was  seized  upon 
by  the  Japanese  Government  as  immediate  excuse 
for  the  presentation  to  China  of  the  Twenty-one 
Demands. 


JAPAN  AND  THE  TSINGTAO  CUSTOMS  OFFICE 

THE  most  difficult  question  for  adjustment 
following  the  military  occupation  of  the  Kiao- 
chow  leased  territory  by  the  Japanese  forces 
was  the  administration  of  the  Chinese  Maritime 
Customs  Office  at  Tsingtao.  It  may  be  recalled  that, 
upon  the  capture  of  the  German  leased  territory, 
Japan  seized  the  Chinese  Customs  Office  and  placed 
it  under  the  Japanese  military  administration.  On 
December  24,  1914,  provisional  regulations  for  the 
Tsingtao  Customs  were  issued.  While  an  effort  was 
made  to  follow  the  precedents  hitherto  adopted  by 
the  Germans,  the  regulations  specifically  stated  that 
"  exemption  from  duty  and  other  privileges  and 
facilities  as  enjoyed  hitherto  by  Germany  and  Ger- 
man subjects  shall  be  taken  over  by  Japan  and 
Japanese  subjects,"  and  that  "all  customs  procedures 
concerning  ships'  cargoes  and  other  communications 
to  the  customs  shall  be  written  in  Japanese."  It 
should  be  carefully  borne  in  mind  that  the  adminis- 
tration of  the  Custom  House  at  Tsingtao,  or  at  any 
other  treaty  port,  was  a  political  right  which  the 
Chinese  Government  could  ill  afford  to  share  with 
any  foreign  government.  The  taking  over  of  the 
Tsingtao  Customs  administration  during  the  war  was 
a  military  measure,  and  as  such,  it  was  contrary  to 
the  wishes  of  the  Chinese  Government  and  beyond  its 

54 


JAPAN  AND  THE  TSINGTAO  CUSTOMS          55 

control.  It  was,  however,  perfectly  natural  that, 
upon  the  cessation  of  hostilities,  the  Chinese  Govern- 
ment should  demand  the  return  of  the  normal  condi- 
tion and  that  the  Customs  should  be  administered 
by  the  Chinese  Government  as  it  had  been  ever  before. 
It  was  in  connection  with  the  reopening  of  the  Chi- 
nese Maritime  Customs  Office  that  Japan  betrayed 
her  secret  ambitions  in  Shantung.  We  need  only 
refer  to  an  excellent  account  on  the  subject  in  the 
Far  Eastern  Review  of  February,  1915,  to  know  the 
necessary  details : 

"The  administration  of  Tsingtao  had  been  taken  over  solely 
by  the  Japanese  military  authorities,  either  by  arrangement  with 
the  British  or  otherwise.  Nothing  of  real  importance  occurred 
until  the  question  of  reopening  the  Maritime  Customs  Office 
at  the  port  arose.  It  is  true  that  British  merchants  who  had 
carried  on  business  at  Tsingtao  were  held  up  at  Tsinanfu  and 
refused  permission  to  return  to  the  port,  and  it  is  also  true  that 
a  Japanese  line  of  steamers  was  granted  permission  to  run  to 
Tsingtao  while  this  privilege  was  forbidden  to  the  steamers  of 
other  nationals.  At  the  moment  of  writing,  however,  British 
vessels  have  been  allowed  to  enter  Kiaochow  Bay.  But  these 
things  were  not  regarded  as  being  of  very  great  importance,  and 
it  was  thought  that  matters  would  soon  adjust  themselves.  The 
Customs  incident,  however,  betrayed  the  course  of  action  that 
Japan  proposed  to  adopt.  It  has  to  be  remembered  that  by- 
virtue  of  an  agreement  concerning  the  establishment  of  a  Mari- 
time Customs  Office  at  Tsingtao,  concluded  between  the  German 
Minister  at  Peking  and  the  late  Sir  Robert  Hart,  then  Inspector- 
General  of  Customs,  Germany  obtained  certain  privileges  in 
regard  to  the  personnel  of  the  Tsingtao  Customs  staff.  The  first 
three  clauses  of  the  agreement  were  as  follows: 

1.  The  Commissioner  or  the  Chief  of  the  Maritime  Customs 
Office  at  Tsingtao  is  to  be  of  German  nationality.    The  Inspector- 
General  of  Customs  will  come  to  an  understanding  with  the 
German  Legation  at  Peking  in  case  of  appointing  a  new  Com- 
missioner. 

2.  The   members   of   the    European    staff   of   the   Maritime 


56  THE  SHANTUNG  QUESTION 

Customs  Office,  at  Tsingtao  shall,  as  a  rule,  be  of  German 
nationality;  in  case,  however,  of  a  suddenly  occurring  vacancy 
or  of  temporary  requirements  of  the  service,  members  of  other 
nationalities  may  be  provisionally  sent  to  Tsingtao. 

3.  The  Inspector-General  of  Maritime  Customs  will  inform 
the  Governor  of  Kiaochow  beforehand  about  all  changes  in  the 
staff  of  the  Customs  Office  at  Tsingtao;  this,  however,  does  not 
apply  to  the  employes  of  the  Chinese  staff. 

" China,  having  accepted  Japan's  promise  of  her  intention  to 
hand  back  Kiaochow  at  its  face  value,  considered  that  the  situa- 
tion in  regard  to  the  Customs  would  be  met  were  she  to  appoint 
a  British  Commissioner  in  the  usual  way — namely,  upon  the 
nomination  of  Mr.  Aglen,  the  Inspector  General  of  Customs 
— and  she  proposed  the  British  Commissioner  at  Mukden.  Japan 
at  once  entered  an  objection.  China  then  nominated  the  Jap- 
anese Commissioner  at  Soochow  for  the  post,  with  a  Briton  as 
Deputy  Commissioner,  but  again  Japan  objected.  She  also 
objected  when  it  was  proposed  to  eliminate  the  proposed  British 
Deputy  Commissioner  but  to  have  the  staff  composed  half  of 
Britons  and  half  of  Japanese.  Then  China  appointed  as  Com- 
missioner at  Tsingtao  Mr.  Tachibana,  who  was  the  Commissioner 
of  Customs  at  Dairen,  but  again  Japan  objected,  and  reiterated 
a  previous  declaration  that  the  only  satisfactory  solution  was  for 
Japan  to  appoint  a  Commissioner  and  staff  from  her  own  people, 
presumably  the  Imperial  Japanese  Customs  Department.  This 
remarkable  suggestion  would,  if  acted  upon,  have  involved  the 
injection  into  China's  Customs  service  of  foreign  officials  who 
in  many  cases  would  have  taken  precedence  for  promotion  over 
men  who  had  served  China  long  and  faithfully.  Obviously 
China  could  never  consent  to  such  an  impairment  of  her  sov- 
ereign rights,  and,  moreover,  even  were  she  inclined  to  do  so 
she  would  have  engaged  herself  in  serious  trouble  with  the 
Treaty  Powers.  It  has  to  be  remembered  that  in  the  Peace 
Protocol  signed  after  the  Boxer  outbreak  the  Customs  revenue 
was  assigned  to  the  service  of  the  Indemnity.  Kiaochow,  even 
when  in  German  occupation,  never  ceased  to  be  Chinese  territory, 
and  the  Customs  revenue  from  there  went  into  the  Chinese 
Treasury  just  as  did  the  Customs  revenue  from  Amoy  or  any 
other  Treaty  port.  It  was,  therefore,  impossible  to  accede  to 
the  Japanese  demand.  Sincerely  desirous  of  effecting  a  compro- 
mise that  would  meet  Japan  more  than  half  way,  China  pro- 
posed that  Mr.  Tachibana  be  accepted  by  Japan  as  Commis- 


JAPAN  AND  THE  TSINGTAO  CUSTOMS          57 

sioner,  and  that  eight  members  of  the  Imperial  Japanese  Customs 
Department  should  be  permitted  to  join  the  Chinese  Customs 
Service  in  the  lowest  grade. 

"It  is  difficult  to  conceive  in  what  way  China  could  have 
done  more  to  meet  the  views  of  Japan,  but,  although  no  official 
announcement  has  been  made,  it  is  understood  that  officials  of 
the  Imperial  Japanese  Customs  Department  are  now  in  charge 
of  the  Customs  Office  at  Tsingtao.  In  this  manner  did  Japan 
signalise  her  respect  for  the  rights  of  China  and  the  Treaty 
Powers. ' ' 


That  the  whole  affair  was  outrageous  is  to  say  the 
least.  China  could  not  accept  the  Japanese  "  solu- 
tion," nor  could  she  afford  to  permit  Japan  to 
appoint  Japanese  officers  to  make  up  the  personnel 
of  the  office.  For  several  months,  negotiations  pro- 
ceeded, to  determine  the  right  of  administration  of 
the  Tsingtao  Customs,  which,  as  a  matter  of  fact,  has 
always  been  a  distinctly  Chinese  institution.  Finally, 
on  August  6,  1915,  an  agreement  was  entered  into 
between  Mr.  Hioki,  Japanese  Minister  in  Peking, 
and  Mr.  F.  A.  Aglen,  Inspector  General  of  the 
Chinese  Customs,  for  the  reopening  of  the  Chinese 
Maritime  Customs  at  Tsingtao.  It  was  stated  that 
the  Inspector  General  also  came  to  an  understanding 
with  the  Japanese  Minister  at  the  same  time  with 
regard  to  increased  Japanese  representation  in  the 
Chinese  Customs  Service,  which  "  satisfied  Japan 
without  affecting  the  organisation  of  the  service. " 
The  agreement  reached  on  August  6,  reads  as  follows : 

Official  English  Text  of  the  Agreement  about  the  reopening 
of  the  Chinese  Maritime  Customs  at  Tsingtao,  and  its  functioning 
in  the  Territory  leased  to  Germany  and  now  in  consequence  of 
the  German-Japanese  war  under  the  military  government  of 
Japan,  August  6,  1915. 


58  THE  SHANTUNG  QUESTION 

1.  It  is  hereby  agreed  that  the  Office  of  the  Chinese  Maritime 
Customs  shall  be  reopened  at  Tsingtao. 

2.  The  agreement  about  the  establishment  of  a  Maritime  Cus- 
toms Office  at  Tsingtao  signed  at  Peking  on  the  17th  of  April, 
1899,   by  the   German   and   Chinese   representatives   for  their 
respective  Governments  and  the  Amendment  to  the  same  signed 
similarly  at  Peking  by  the  German  and  Chinese  representatives 
on  the  first,  December,  1905,  with  replacement  of  the  term  * '  Ger- 
man" by  ''Japanese"  wherever  the  principle  of  this  Agreement 
demands  such  change,  shall  be  held  operative  between  the  Gov- 
ernments of  China  and  Japan  in  regard  to  the  reopening  of 
the  Chinese  Maritime  Customs  Office  at  Tsingtao  and  in  regard 
to  its  regulations  and  procedure. 

3.  The  Chinese  Maritime  Customs  archives,  Service  moneys 
and  all  Service  property  formerly  under  the  control  of  the 
Inspector  General  of  Customs,  which  were  taken  custody  of  by 
the  Japanese  Military  Authorities  at  the  time  of  occupation, 
shall  be  returned  to  the  Inspector  General. 

4.  After  deducing  20  per  cent,  of  the  net  Import  duties  as 
provided  for  in  the  German  Amended  Agreement  of  1905,  the 
Japanese  Government  shall  hand  to  the  Inspector  General  the 
balance  of  the  Customs  revenues  collected  at  Tsingtao  by  the 
Japanese  Authorities  to  date  of  reopening  the  Maritime  Cus- 
toms Office. 

(Signed)     E.  HIOKI, 
Minister  of  Japan. 

(Signed)     F.  A.  AGLEN, 
Inspector  General  of  Customs. 

This  agreement  ceases  to  be  effective  when  the 
Shantung  Treaty  concluded  at  Washington  comes 
into  force.  It  is  understood  that  the  Custom  House 
of  Tsingtao  will  then  be  made  uan  integral  part"  of 
the  Chinese  Maritime  Customs  Administration.  On 
the  other  hand,  China  undertakes  "to  permit  Japan- 
ese traders  in  the  former  German  leased  territory  of 
Kiaochow  to  communicate  in  the  Japanese  language 
with  the  Custom  House  of  Tsingtao/7  and  "to  give 
consideration,  within  the  limits  of  the  established 


JAPAN  AND  THE  TSINGTAO  CUSTOMS          59 

service  regulations  of  the  Chinese  Maritime  Customs, 
to  the  diverse  needs  of  the  trade  of  Tsingtao,  in  the 
selection  of  a  suitable  staff  for  the  said  Custom 
House."  In  other  words,  the  use  of  Japanese 
language  in  communications  will  be  permitted,  and 
as  many  Japanese  as  permissible  will  be  employed  in 
the  service  of  the  Tsingtao  Custom  House. 


VI 

SHANTUNG  AND  THE  TWENTY-ONE  DEMANDS 

WITH  her  forces  in  actual  occupation  of  the 
territory  and  in  control  of  the  railways  and 
mines  in  the  Shantung  province,  Japan 
now  proceeded  to  confirm  by  treaty  what  she  had 
secured  by  force.  Frankly,  Japan  was  very  much 
afraid  that  she  would  not  be  awarded  at  the  con- 
clusion of  peace  the  fruits  of  war,  which  she  deemed 
to  be  her  due  share.  Without  waiting,  therefore,  for 
the  post-bellum  conference,  where  all  questions  aris- 
ing out  of  the  war  were  to  be  discussed  and  disposed 
of,  Japan  stole  a  march  on  her  allies  by  forcing  a 
" settlement'7  with  China  on  the  Shantung  question. 
It  should  be  recalled  that,  in  her  ultimatum  to  Ger- 
many, Japan  called  upon  the  latter  Power  "to  deliver 
on  a  date  not  later  than  September  15,  to  the  Im- 
perial Japanese  authorities,  without  condition  or 
compensation,  the  entire  leased  territory  of  Kiao- 
chow,  with  a  view  to  the  eventual  restoration  of  the 
same  to  China."  Early  in  December,  1914,  Baron 
Kato,  Japanese  Foreign  Minister,  in  answer  to  an 
interpellation  in  the  Diet  as  to  Japan's  pledge  to 
restore  Kiaochow  to  China,  made  an  apparent  effort 
to  get  out  of  the  promise.  He  was  reported  to  have 
said:  "The  purpose  of  the  ultimatum  to  Germany 
was  to  take  Kiaochow  from  Germany  and  so  to 
restore  peace  in  the  Orient.  Restitution  after  a  cam- 
eo 


THE  TWENTY-ONE  DEMANDS  61 

paign  was  not  thought  of  and  was  not  referred  to  in 
the  ultimatum/'  By  this  plain  statement,  very  few 
persons  in  the  Far  Bast  were  at  all  surprised,  for, 
from  the  moment  that  Japan  participated  in  the  war, 
it  was  the  general  belief  that  she  meant  to  seize  Kiao- 
chow,  as  she  had  seized  Port  Arthur  and  Ta-lien-wan 
during  the  Russo-Japanese  war,  not  to  return  it  to 
China,  but  to  keep  it  herself.  The  precipitating 
manner  in  which  she  had  plunged  herself  into  the 
European  struggle  revealed  at  once  the  real  purpose 
of  her  action  and  the  emptiness  of  her  profession 
that  her  desire  was  to  preserve  peace  in  the  Far  East. 
While  this  was  but  a  general  belief,  it  was  soon  con- 
firmed when  Japan  presented  the  Twenty-one  De- 
mands on  China,  seeking,  first  of  all,  to  extract  an 
agreement  from  the  Chinese  Government  that  the 
Shantung  question  was  as  good  as  settled. 

On  January  18,  at  3  p.  m.,  Japan  presented  her 
famous  Twenty-one  Demands.  They  were  divided 
into  five  groups.  The  first  and  easily  the  most  impor- 
tant group  comprised  the  demands  on  Shantung. 
The  Chinese  Government  was  called  upon  to  give 
"full  assent"  to  whatever  arrangement  that  Japan 
might  come  to  with  Germany  in  regard  to  German 
rights,  privileges  and  concessions  in  Shantung,  to 
engage  not  to  lease  or  cede  to  a  third  Power  any 
territory  within  the  province  of  Shantung  or  any 
island  along  its  coast,  to  consent  to  "Japan's  building 
a  railway  from  Chefoo  or  Lungkow  to  join  the  Kiao- 
chow-Tsinanfu  Kailway,"  and,  lastly,  to  open  "im- 
portant cities  and  towns  in  the  province  of  Shantung 
as  commercial  ports."  The  real  significance  of  these 
demands  lay  in  the  fact  that  Japan  was  anxious  to 


62  THE  SHANTUNG  QUESTION 

secure  China's  assent  to  the  transfer  of  German 
rights  and  concessions  in  Shantung.  It  is  quite  easy 
to  see  that,  with  China's  assent  obtained,  Japan 
would  be  in  a  position  to  confront  as  a  fait  accompli 
the  other  allied  Powers  who  might  not  see  fit  to 
transfer  German  interests  in  Shantung  to  Japan. 

Into  the  details  of  the  Twenty-one  Demands,  it  is 
unnecessary  for  us  to  inquire.*  We  need  refer  very 
briefly  to  the  Chino-Japanese  negotiation  on  the 
Shantung  demands  in  order  to  show  how  the  ques- 
tion had  been  viewed  by  the  Chinese  Government. 

At  the  first  conference  held  on  February  2,  1915, 
the  Chinese  Minister  of  Foreign  Affairs  pointed  out 
that,  inasmuch  as  the  Shantung  demand  related  to 
the  post-bellum  settlement,  it  should  be  left  over  for 
consideration  by  all  the  other  Powers  interested  at 
the  Peace  Conference.  The  Japanese  Minister 
refused  to  accept  this  view.  Anxious  to  meet  the 
Japanese  demand  more  than  half  way,  the  Chinese 
Government  agreed  in  principle  to  the  transfer  of 
the  German  rights  and  interests  in  Shantung  to 
Japan.  At  the  second  conference  held  on  February 
22,  the  Chinese  Government  agreed  to  the  demand  not 
to  cede  or  lease  to  any  Power  any  territory  in  Shan- 
tung or  on  its  coast.  At  the  fifth  conference  held  on 
February  28,  the  Chinese  Government  agreed  to  give 
Japan  the  preference,  provided  Germany  abandoned 
the  privilege,  to  finance  the  railway  from  Chef oo  or 
Lungkow  to  connect  with  the  Kiaochow-Tsinanfu 
Railway,  if  China  should  decide  to  build  the  said  line 
with  foreign  capital.  And  at  the  sixth  conference 

*  Cf.  author's  The  Twenty-one  Demands  and  the  companion  volume,  The 
Chino-Japanese  Treaties  of  May  25,  1915. 


THE  TWENTY-ONE  DEMANDS  63 

held  on  March  3,   China  agreed   to   open  certain 
important  cities  in  Shantung  as  commercial  ports. 

It  is  evident  that  China  practically  acceded  to  all 
the  Japanese  demands  on  Shantung.  In  acceding  to 
them,  the  Chinese  Government  made  certain  counter 
proposals,  one  of  which  was  couched  in  these  terms : 

"The  Japanese  Government  declares  that  when 
the  Chinese  Government  gives  its  assent  to  the  dis- 
position of  the  rights  above  referred  to,  Japan  will 
restore  the  Leased  Territory  of  Kiaochow  to  China, 
and  further  recognises  the  right  of  the  Chinese  Gov- 
ernment to  participate  in  the  negotiations  referred 
to  between  Japan  and  Germany." 

In  the  official  statement  by  the  Chinese  Govern- 
ment regarding  the  Chino-Japanese  negotiations,  it 
was  pointed  out  that  the  above  counter  proposal 
"was  clearly  not  a  demand  on  Japan,  but  only  a 
reiteration  of  Japan's  voluntary  statement  in  her 
ultimatum  to  Germany  on  August  15,  1914,  and 
repeated  in  public  statements  by  the  Japanese 
Premier."  The  Chinese  Government,  it  was  pointed 
out,  left  the  entire  question  of  the  conditions  of 
restoration  to  be  determined  by  Japan.  As  to  the 
suggestion  of  the  participation  by  the  Chinese  Gov- 
ernment in  the  negotiations  between  Japan  and 
Germany  relating  to  the  disposition  of  German 
interests  in  Shantung,  it  was  made  uin  view  of  the 
fact  that  Shantung,  the  object  of  future  negotiation 
between  Japan  and  Germany,  is  a  Chinese  province, 
and  therefore  China  is  the  Power  most  concerned  in 
the  future  of  that  territory." 

Two  other  counter  proposals  were  made  by  the 
Chinese    Government.     The    first    suggested    "the 


64  THE  SHANTUNG  QUESTION 

assumption  by  Japan  of  responsibility  for  indemnifi- 
cation of  the  losses  arising  out  of  the  military 
operations  against  Germany  at  Kiaochow.  The 
other  counter  proposal  was  "that,  prior  to  the 
restoration  of  the  Kiaochow  territory  to  China,  the 
Maritime  Customs,  the  telegraphs  and  post  offices 
should  be  continued  to  be  administered  as  heretofore ; 
that  the  military  railway,  the  telegraph  lines,  etc., 
which  were  installed  by  Japan  to  facilitate  her  mili- 
tary operations,  should  be  removed  forthwith;  that 
the  Japanese  troops  now  stationed  outside  of  the 
leased  territory  should  be  first  withdrawn,  and  those 
within  the  territory  should  be  recalled  at  the  time 
when  Kiaochow  is  returned  to  China.  Shantung 
being  a  Chinese  province,  it  was  natural  for  China 
to  be  anxious  concerning  the  restoration  of  the  stat u 
quo  ante  bellum." 

All  these  counter  proposals  were,  at  the  request  of 
the  Japanese  Minister,  postponed  for  later  considera- 
tion. 

Negotiations  proceeded  very  smoothly  until  April 
17,  when  the  Japanese  Minister  suspended  them.  On 
April  26,  the  Chinese  Government  was  given  a  list  of 
Twenty-four  Demands,  and  was  requested  to  accept 
them  "  without  delay. "  At  the  same  time,  as  an 
encouragement  to  the  Chinese  Government  to  accept 
these  revised  demands,  "the  Japanese  Minister  stated 
that  the  Japanese  Government  would  restore  the 
leased  territory  of  Kiaochow  to  China  at  an  oppor- 
tune time  in  the  future  and  under  proper  conditions. ' ' 
On  May  1,  the  Chinese  Government  replied,  refusing 
to  accede  to  the  revised  demands.  The  Japanese 
Government  thereupon  expressed  itself  "as  being 


THE  TWENTY-ONE  DEMANDS  65 

dissatisfied  with  China's  reply,  and  withdrew  the 
conditional  offer  to  restore  Kiaochow  to  China  made 
on  April  26. "  On  May  7,  Japan  served  her  famous 
ultimatum  on  China,  forcing  the  latter  to  accept  the 
revised  list  of  demands  within  forty-eight  hours. 
The  ultimatum  was  complied  with  the  following  day. 
According  to  the  agreements  reached  on  May  25, 
1915,  as  the  result  of  the  Twenty-one  Demands,  China 
acceded  to  all  the  demands  of  the  Shantung  group. 
On  the  other  hand,  Japan  undertook  to  restore  the 
Kiaochow  leased  territory  to  China  on  the  condition 
(1)  that  the  whole  of  Kiaochow  Bay  was  to  be  opened 
as  a  commercial  port,  (2)  that  a  concession  under  the 
exclusive  jurisdiction  of  Japan  was  to  be  established 
at  a  place  designated  by  the  Japanese  Government, 

(3)  that  an  international  concession  might  be  estab- 
lished if  the  foreign  Powers  should  so  desire  it,  and 

(4)  that  the  Japanese  and  Chinese  Governments 
should  by  mutual  agreement  arrange  the  disposition 
of  German  public  properties  in  Shantung. 

Mr.  Robert  Lansing,  former  Secretary  of  State  of 
the  United  States,  made  this  observation:  "The 
important  point  to  be  noted  in  this  (Shantung) 
demand  is  that  Japan  did  not  consider  that  the  occu- 
pation of  Kiaochow  and  the  seizure  of  the  German 
concessions  transferred  title  to  her,  but  looked  for- 
ward to  a  future  transfer  by  treaty. "  In  other 
words,  Japan  was  anxious,  as  has  been  pointed  out 
at  the  beginning  of  the  chapter,  to  confirm  by  treaty, 
or  by  a  semblance  of  treaty,  what  she  had  taken 
possession  of  by  force. 


VII 

ALLIED  SECRET  AGREEMENTS  ON  SHANTUNG 

ONE  typical  instance  of  secret  diplomacy, 
which  shows  it  in  its  most  lurid  light,  is  the 
secret  arrangement  made  between  Japan  on 
the  one  side  and  Great  Britain,  Italy,  Russia  and 
France  on  the  other,  in  regard  to  the  disposition  of 
the  German  possessions  in  the  Pacific  and  the  Ger- 
man interests  in  the  Shantung  province.  In  the 
month  of  February  and  of  March,  1917,  Japan 
entered  into  separate  agreement  with  each  of  the 
Powers  mentioned  above,  seeking,  in  every  case,  that 
Japan's  claims  to  German  interests  in  Shantung  and 
possessions  in  the  Pacific  north  of  the  Equator  should 
be  recognised  at  the  Peace  Conference.  It  should 
be  noted  that  these  agreements  were  reached  between 
the  contracting  Powers  without  the  knowledge  either 
of  China  or  of  the  United  States,  who  did  not  know  of 
their  existence  until  they  were  given  out  at  the  Paris 
Peace  Conference.  At  the  meeting  of  the  Council 
of  Ten,  January  27,  1919,  Baron  Makino,  in  answer 
to  the  proposal  that  Shantung  should  be  given  back 
to  China,  intimated  that  this  could  not  be  done 
because  of  previous  arrangements.  When  President 
Wilson,  who  was  equally  uninformed  of  the  secret 
understandings,  asked  that  their  texts  should  be  pro- 
vided for  the  information  of  the  Conference,  Baron 
Makino  agreed,  and  then  in  the  next  moment,  hesi- 

66 


THE  ALLIED  SECRET  AGREEMENTS  67 

tated,  by  saying  that  he  could  not  make  them  known 
without  permission  from  Tokio.  The  texts  were, 
however,  given  out  later,  from  which  we  can  easily 
notice  the  fact  that  they  were  concluded,  one  and  all, 
at  the  instance  of  the  Japanese  Government.  As 
early  as  in  January,  1917,  informal  conversations 
were  begun  between  the  Japanese  Minister  of  For- 
eign Affairs  and  the  British  Ambassador  at  Tokio, 
for  the  purpose  of  reaching  a  definite  understanding 
as  to  Japan's  succession  to  the  German  interests  in 
Shantung  and  to  the  German  possessions  in  the 
Pacific  north  of  the  Equator.  In  the  German  pos- 
sessions in  the  Pacific,  China  was  not  directly 
interested.  But  the  disposition  of  the  German  rights 
and  concessions  in  Shantung  was  a  matter  of  vital 
concern  to  China.  It  is  outrageous,  to  say  the  least, 
that  any  arrangement  for  the  disposition  of  the 
German  interests  in  Shantung  should  be  made  behind 
the  back  of  China,  who  was  not  an  enemy  belligerent, 
but  was  about  to  join  the  rank  of  the  Allied  and 
Associated  Powers. 

Japan's  motive  in  concluding  these  arrangements 
is  easily  understandable.  No  one  knew  it  better  than 
Japan  herself  that  the  rights  and  interests  which  she 
had  acquired  in  Shantung  were  not  final,  and  that 
they  would  have  to  be  definitely  disposed  of  at  the 
Peace  Conference.  Japan  was  equally  aware  of  the 
fact  that  the  arrangement  exacted  from  the  Chinese 
Government  as  a  result  of  the  Twenty-one  Demands 
could  have  no  legal  validity  and  no  international 
recognition.  With  the  possibility  of  China  partici- 
pating in  the  war  at  an  early  moment,  it  was  but 
natural  that  she  became  anxious  to  confirm  by  agree- 


68  THE  SHANTUNG  QUESTION 

ment  what  she  had  acquired  by  force.  The  follow- 
ing is  the  text  of  the  note  which  Sir  Conyngham 
Greene.  British  Ambassador  at  Tokio,  had  addressed 

to  the  Japanese  Minister  of  Foreign  Affairs : 

• 

THE  BRITISH  EMBASSY  TO  THE  JAPANESE  MINISTRY 
OF  FOREIGN  AFFAIRS 

February  16,  1917 
Monsieur  le  Ministre: 

With  reference  to  the  subject  of  our  conversation  of  the  27th 
ultimo  when  Your  Excellency  informed  me  of  the  desire  of  the 
Imperial  Government  to  receive  an  assurance  that,  on  the  occa- 
sion of  a  Peace  Conference,  His  Britannic  Majesty's  Government 
will  support  the  claims  of  Japan  in  regard  to  the  disposal  of 
Germany's  rights  in  Shantung  and  possessions  in  the  Islands 
North  of  the  Equator,  I  have  the  honor,  under  instructions 
received  from  His  Britannic  Majesty's  Principal  Secretary  of 
State  for  Foreign  Affairs,  to  communicate  to  Your  Excellency 
the  following  message  from  His  Britannic  Majesty's  Govern- 
ment: 

His  Majesty's  Government  accedes  with  pleasure  to  the  request 
of  the  Japanese  Government  for  an  assurance  that  they  will 
support  Japan's  claims  in  regard  to  the  disposal  of  Germany's 
rights  in  Shantung  and  possessions  in  Islands  North  of  Equator 
on  the  occasion  of  Peace  Conference,  it  being  understood  that 
the  Japanese  Government  will,  in  eventual  peace  settlement,  treat 
in  the  same  spirit  Great  Britain 's  claims  to  German  Islands  South 
of  Equator. 

I  avail  myself  of  this  opportunity,  Monsieur  le  Ministre,  to 
renew  to  Your  Excellency  the  assurance  of  my  highest  con- 
sideration. 

(Signed)  CONYNGHAM  GREENE, 

H.  B.  M.  Ambassador, 

His  Excellency  Tokyo. 

VISCOUNT  ICHIRO  MOTONO, 

H.  I.  J.  M.  Minister  for  Foreign  Affairs, 
etc.,  etc.,  etc. 

It  should  be  noted  that  " conversation"  on  the  sub- 
ject began  as  early  as  January  27,  1917,  between 


THE  ALLIED  SECRET  AGREEMENTS  69 

Viscount  Montono  and  Sir  Conyngham  Greene.  The 
British  Government  acceded  "with  pleasure "  to  the 
request  of  the  Japanese  Government  that  Japan's 
claims  in  regard  to  the  disposal  of  the  German  inter- 
ests in  Shantung  and  the  German  island  possessions 
in  the  Pacific  north  of  the  Equator  would  be  sup- 
ported by  Great  Britain  on  the  occasion  of  the  Peace 
Conference.  It  should  also  be  noted  that,  in  return, 
the  Japanese  Government  was  to  "  treat  in  the  same 
spirit  Great  Britain's  claims  to  German  islands  south 
of  Equator."  In  other  words,  it  was  nothing  short 
of  a  mutual  agreement  that  Japan  and  Great  Britain 
should  at  the  Peace  Conference  support  each  other's 
claims. 

Five  days  elapsed  before  the  Japanese  Government 
replied  to  the  British  Ambassador,  expressing  itself 
as  "deeply  appreciative  of  the  friendly  spirit"  in 
which  the  British  Government  had  given  its  assur- 
ance. The  note  of  the  Japanese  Government  of 
February  21,  reads : 

THE  JAPANESE  MINISTRY  OF  FOREIGN  AFFAIRS 
TO  THE  BRITISH  EMBASSY 

February  21,  1917 
(Translation) 
Monsieur  1 '  Ambassadeur : 

I  have  the  honor  to  acknowledge  the  receipt  of  Your  Excel- 
lency's Note  of  the  16th  instant,  giving  assurance  that  His 
Britannic  Majesty's  Government  will  support  the  claims  to  be 
advanced  by  the  Imperial  Government  in  regard  to  the  disposal 
of  Germany's  rights  in  Shantung  and  possessions  in  Islands 
North  of  Equator  on  the  occasion  of  a  Peace  Conference. 

The  Japanese  Government  is  deeply  appreciative  of  the 
friendly  spirit  in  which  your  Government  has  given  the  assur- 
ance, and  is  happy  to  note  it  as  a  fresh  proof  of  the  close  ties 
that  unite  the  two  allied  Powers.  I  take  pleasure  in  stating  that 


70  THE  SHANTUNG  QUESTION 

the  Japanese  Government,  on  its  part,  is  fully  prepared  to  sup- 
port in  the  same  spirit  the  claims  which  may  be  put  forward  at 
the  Peace  Conference  by  His  Britannic  Majesty 's  Government  in 
regard  to  German  possessions  in  Islands  South  of  Equator. 

I  avail  myself  of  this  opportunity,  Monsieur  1  'Ambassadeur,  to 
renew  to  Your  Excellency  the  assurance  of  my  highest  con- 
sideration. 

(Signed)  ICHIRO  MOTONO, 

etc.,  etc.,  etc. 
His  Excellency 

SlB  CONYNGHAM  GREENE, 

etc.,  etc.,  etc. 

Great  Britain  was  not  the  only  Power  that  Japan 
had  approached  for  a  previous  understanding.  Three 
days  after  the  receipt  of  the  British  assurance,  the 
Japanese  Government  declared  to  the  Russian  and 
French  embassies  in  Tokio  that  Japan  intended  "to 
demand  from  the  German  Government  at  the  time 
of  peace  negotiations  the  surrender  of  the  territorial 
rights  and  special  interests  Germany  possessed  before 
the  war  in  Shantung  and  in  the  islands  belonging  to 
her,  situated  to  the  north  of  the  Equator,  in  the 
Pacific  Ocean. "  "In  view  of  the  legitimacy  of  these 
claims,"  Japan  counted  upon  Russia  and  Prance  for 
"full  support."  The  following  is  the  identical  note 
which  was  addressed  to  the  Governments  of  Russia 
and  Prance,  under  the  date  of  February  19,  1917 : 

THE  JAPANESE  MINISTRY  OF  FOREIGN  AFFAIRS  TO  THE 
RUSSIAN  AND  FRENCH  EMBASSIES 

February  19th,  1917 
(Translation) 

The  Imperial  Government  has  not  yet  formally  entered  into 
conversations  with  the  Entente  Powers  concerning  the  condi- 
tions of  peace  it  proposes  to  present  to  Germany,  being  guided 
by  the  thought  that  such  questions  ought  to  be  decided  in  concert 


THE  ALLIED  SECRET  AGREEMENTS  71 

between  Japan  and  the  said  Powers  at  the  moment  when  the 
peace  negotiations  start. 

Nevertheless,  in  view  of  recent  development  in  the  general 
situation,  and  in  view  of  the  particular  arrangements  concern- 
ing peace  conditions,  such  as  arrangements  relative  to  the  dis- 
position of  the  Bosphorous,  Constantinople  and  the  Dardanelles, 
having  already  been  entered  into  by  the  Powers  interested,  the 
Imperial  Government  believes  that  the  moment  has  come  for  it 
also  to  express  its  desiderata  relative  to  certain  conditions  of 
peace  essential  to  Japan  and  to  submit  them  for  the  consideration 
of  the  Government  of  Russia  (of  the  French  Republic). 

The  Government  of  Russia  (of  the  Republic)  is  fully  aware 
of  all  the  efforts  the  Imperial  Government  has  made  in  a  general 
manner  to  accomplish  its  task  in  the  present  war,  and  particu- 
larly with  a  view  of  guaranteeing  for  the  future  the  peace  of 
Oriental  Asia  and  of  the  security  of  the  Japanese  Empire,  for 
both  of  which  it  is  absolutely  necessary  to  deprive  Germany  of 
its  bases  of  political,  military  and  economic  activity  in  the 
Far  East. 

Under  these  conditions  the  Imperial  Government  intends  to 
demand  from  the  German  Government  at  the  time  of  peace 
negotiations  the  surrender  of  the  territorial  rights  and  special 
interests  Germany  possessed  before  the  war  in  Shantung  and 
in  the  Islands  belonging  to  her,  situated  to  the  North  of  the 
Equator  in  the  Pacific  Ocean. 

The  Imperial  Government  ventures  to  hope  that  the  Govern- 
ment of  Russia  (of  the  French  Republic),  in  view  of  the 
legitimacy  of  these  claims,  will  give  the  assurance  that,  when- 
ever the  case  arises,  the  Imperial  Government  may  count  upon 
its  full  support  on  this  question. 

It  goes  without  saying  that  reparations  for  damages  caused 
to  the  lives  and  property  of  the  Japanese  people  by  the  unjusti- 
fiable attacks  of  the  enemy,  as  well  as  other  conditions  of  peace 
of  a  character  common  to  all  the  Entente  Powers,  are  entirely 
outside  the  consideration  of  the  present  question. 

It  is  interesting  to  note  that,  in  its  reply  of  March  1, 
the  French  Government,  while  accepting  the  claims 
of  the  Japanese  Government,  requested  that  the 
latter  should  use  its  influence  "to  obtain  from  China 
the  rupture  of  her  diplomatic  relations  with  Ger- 


72  THE  SHANTUNG  QUESTION 

many"  and  "to  push  this  act  to  a  desirable  extent." 
The  "desirable  extent"  meant  China's  participation 
in  the  war.  The  following  communication  is  interest- 
ing for  many  reasons : 

THE  FRENCH  EMBASSY  TO  THE  JAPANESE  MINISTRY 
OF  FOREIGN  AFFAIRS 

March  1st,  1917 
(Translation) 

The  Government  of  the  Republic  is  disposed  to  give  the 
Japanese  Government  its  assistance  in  regulating,  at  the  time  of 
the  peace  negotiations,  questions  essential  to  Japan  concerning 
Shantung  and  the  German  Islands  in  the  Pacific  situated  in  the 
North  of  the  Equator.  It  also  agrees  to  support  the  demands  of 
the  Imperial  Government  for  the  surrender  of  the  rights  of 
Germany  possessed  before  the  war  in  this  Chinese  province  and 
the  Islands. 

M.  Briand  requests,  on  the  other  hand,  that  the  Japanese 
Government  give  its  support  to  obtain  from  China  the  rupture 
of  her  diplomatic  relations  with  Germany,  and  that  she  push 
this  act  to  a  desirable  extent.  The  consequences  of  this,  accord- 
ing to  him,  would  be : — 

1.  The  handing  over  of  passports  to  the  German  diplomatic 
and  consular  agents. 

2.  The  obligation  of  all  German  nationals  to  leave  Chinese 
territory. 

3.  The  internment  of  German  ships  having  sought  refuge  in 
Chinese  ports  and  the  ultimate  requisition  of  these  ships  in 
order  to  place  them  at  the  disposition  of  the  Allies  following 
the  example  of  Italy  and  Portugal.     From  the  advices  which 
reached  the  French  Government,  there  are  fifteen  German  ships 
in  Chinese  ports  totaling  about  40,000  tons. 

4.  The   sequestration    of   German    commercial   houses   estab- 
lished in  China. 

5.  The  forfeiture  of  the  rights  of  Germany  in  the  concessions 
she  possessed  in  certain  ports. 

All  the  political  consequences  of  China's  severance 
of  diplomatic  relations  with  Germany,  and  all  the 
benefits  that  could  be  derived  from  the  step,  were 


THE  ALLIED  SECRET  AGREEMENTS  73 

clearly  anticipated  by  the  French  Government.  It  is 
almost  revolting  to  think,  however,  that,  while 
anxious  to  have  China  sever  her  diplomatic  relations 
with  Germany  and  push  this  act  "to  a  desirable 
extent/7  the  French  Government  saw  fit  to  hand 
Shantung  to  Japan. 

To  the  French  overture,  the  Japanese  Government 
returned  the  following  innocuous  reply,  which,  while 
nailing  down  the  undertaking  by  the  French  Govern- 
ment in  regard  to  the  disposition  of  the  German 
interests  in  Shantung  and  in  the  Pacific,  did  not 
promise  anything  that  had  not  been  promised  before : 


THE  JAPANESE  MINISTRY  OF  FOREIGN  AFFAIRS 
TO  THE  FRENCH  EMBASSY 

March  6th,  1917 
(Translation) 

The  Ministry  of  Foreign  Affairs  has  the  honor  to  acknowledge 
the  receipt  of  the  note  of  the  French  Embassy,  under  the  date 
of  March  1st,  1917,  informing  that  the  French  Government  is 
disposed  to  give  the  Imperial  Government  its  assistance  in 
regulating,  at  the  time  of  the  peace  negotiations,  questions  essen- 
tial to  Japan  concerning  Shantung,  and  the  German  Islands  in 
the  Pacific,  situated  to  the  North  of  the  Equator,  and  that  it 
agrees  to  support  the  demands  of  the  Imperial  government  for 
the  surrender  of  the  rights  Germany  possessed  before  the  war 
in  Shantung  and  in  the  aforesaid  Islands. 

The  Imperial  Government  takes  note  of  this  communication 
with  profound  gratitude  for  the  friendly  sentiment  which 
inspired  the  French  Government  in  giving  its  full  assent  to  the 
desiderata  of  the  Imperial  Government. 

The  aforesaid  Note  equally  set  forth  the  desire  of  His  Excel- 
lency, M.  Briand,  of  ensuring  the  support  of  the  Imperial 
Government  with  a  view  to  obtaining  from  China  the  rupture 
of  her  diplomatic  relations  with  Germany,  to  its  full,  desirable 
extent.  Concerning  the  question,  the  Imperial  Government, 
as  the  French  Government  was  constantly  kept  informed  if  it 
did  not  fail  to  make  all  efforts  from  the  beginning,  consequently, 


74  THE  SHANTUNG  QUESTION 

the  Imperial  Government  has  hereby  only  to  confirm  its  intention 
of  giving  its  entire  support  to  the  desire  expressed  by  M.  Briand, 
in  accord  with  a  view  to  bringing  about  the  consequences  enumer- 
ated in  the  above-mentioned  Note. 

Japan's  diplomacy  has  been  noted  for  its 
thoroughness,  which  has  found  a  new  proof  in  the 
fact  that,  aside  from  France  and  Great  Britain, 
Japan  had  also  approached  Russia  and  Italy  for  a 
similar  assurance.  In  the  following,  we  reproduce 
the  notes  exchanged  between  the  Japanese  Govern- 
ment, and  the  Italian  and  Russian  Governments,  in 
order  to  show  the  complete  chain  of  diplomacy  which 
bound  the  allied  and  associated  Powers  at  the  Peace 
Conference : 

THE  RUSSIAN  EMBASSY  TO  THE  JAPANESE  MINISTRY  OF 
FOREIGN   AFFAIRS 

February  20th,  March  5th,  1917 
(Translation) 

In  reply  to  the  Note  of  the  Japanese  Ministry  of  Foreign 
Affairs,  under  the  date  of  February  19th  last,  the  Russian 
Embassy  is  charged  with  giving  the  Japanese  Government  the 
assurance  that  it  can  entirely  count  on  the  support  of  the 
Imperial  Government  of  Russia  with  regard  to  its  desiderata 
concerning  the  eventual  surrender  to  Japan  of  the  rights  belong- 
ing to  Germany  in  Shantung  and  of  the  German  Islands,  occupied 
by  the  Japanese  forces,  in  the  Pacific  Ocean  to  the  North  of  the 
Equator. 

THE  JAPANESE  MINISTRY  OF  FOREIGN  AFFAIRS  TO  THE 
RUSSIAN  EMBASSY 

March  8th,  1917 
(Translation) 

The  Ministry  of  Foreign  Affairs  has  the  honor  to  acknowledge 
the  receipt  of  the  Note  of  the  Russian  Embassy,  under  the  date 
of  March  5th,  1917,  in  reply  to  the  Note  of  the  Ministry  under  the 
date  of  February  19th  of  the  same  year. 


THE  ALLIED  SECRET  AGREEMENTS  75 

In  the  said  Note,  the  Russian  Embassy  was  good  enough  to 
declare  that  it  was  charged  with  giving  the  Japanese  Government 
the  assurance  that  it  could  entirely  count  upon  the  support  of 
the  Russian  Government  with  regard  to  its  desiderata  concerning 
the  eventual  surrender  to  Japan  of  the  rights  belonging  to 
Germany  in  Shantung  and  of  the  German  Islands  in  the  Pacific, 
situated  to  the  North  of  the  Equator. 

The  Japanese  Government  takes  note  of  this  communication 
with  profound  gratitude  for  the  sentiment  which  inspired  the 
Russian  Government  in  giving  its  full  assent  to  the  desiderata 
of  the  Japanese  Government. 

It  should  be  noted  that  the  following  notes  were 
exchanged,  not  at  Tokio,  but  at  Rome,  between  the 
Italian  Foreign  Office  and  the  Japanese  Embassy : 

THE  JAPANESE  EMBASSY  TO  THE  ITALIAN  GOVERNMENT 

March  23rd,  1917 
(Translation) 

The  Imperial  Japanese  Government  intends  to  demand  from 
the  German  Government  at  the  negotiations  of  peace,  the  sur- 
render of  the  territorial  rights  and  special  interests  which 
Germany  possessed,  before  the  war,  in  Shantung  and  in  the 
German  Islands  in  the  Pacific,  situated  North  of  the  Equator. 

In  view  of  the  present  phase  of  events,  the  Imperial  Govern- 
ment believed  it  bound  to  ensure  forthwith  the  entire  support 
of  the  English,  French  and  Russian  Governments,  in  case  the 
foregoing  claims  should  b£  presented  to  Germany  at  the  peace 
negotiations. 

In  bringing  to  the  knowledge  of  the  Royal  Government  of 
Italy  as  a  very  confidential  information  that  an  arrangement  has 
recently  been  entered  into  between  the  Imperial  Government  of 
one  part  and  the  British,  French  and  Russian  Governments  of  the 
other  part,  relating  to  the  foregoing,  the  Imperial  Government 
has  the  firmest  conviction  that  the  Royal  Government  of  Italy, 
being  inspired  by  the  sentiments  of  friendship  which  animate 
the  two  countries,  and  considering  the  necessity  of  mutual 
assistance  for  the  triumph  of  the  common  cause  in  the  present 
war,  will  be  good  enough  to  welcome  with  satisfaction  the  conclu- 
sion of  the  above-mentioned  arrangement. 


76  THE  SHANTUNG  QUESTION 

ITALY'S  REPLY  TO  THE  NOTE  OF  THE  JAPANESE  EMBASSY 

March  23rd,  1917 

Upon  reading  the  foregoing  Memorandum,  the  Italian  Minister 
for  Foreign  Affairs  said  to  the  Japanese  Ambassador  that  the 
Italian  Government  had  no  objection  regarding  the  matter. 

These  secret  agreements,  which  Japan  had  made 
with  the  four  Entente  Powers  at  the  very  time  when 
they  were  endeavouring  to  bring  China  into  the  war, 
were  immoral,  but  perhaps  quite  in  keeping  with  the 
methods  of  secret  diplomacy,  of  which  the  Japanese, 
no  less  than  the  statesmen  of  Europe,  are  past  mas- 
ters. It  was  no  surprise  at  all  that  Japan  had  seen 
fit  to  resort  to  devious  ways  of  insuring  her  claims  at 
the  Peace  Conference.  The  surprise  was  that  the 
Allied  Powers  had  at  all  entered  into  these  secret 
understandings  at  the  expense  of  China,  especially 
considering  that  they  had  been  looking  forward  to 
China's  assistance  in  th6  war.  The  plea  was  made 
that  the  Allied  Powers,  at  the  time  of  the  conclusion 
of  the  secret  understandings,  were  badly  in  need  of 
Japanese  assistance,  confronted  as  they  were  with 
the  certain  prospect  of  defeat  on  the  Western 
European  front.  They  were,  therefore,  it  was 
pointed  out,  willing  to  obtain  Japanese  help  and 
co-operation  at  any  price.  While  it  was  to  be  granted 
that  the  Allied  policy  was  dictated  by  considerations 
of  military  necessity,  this  was  no  reason  at  all  why 
China's  rights  and  interests  should  be  sacrificed.  If 
the  Allies  had  a  price  to  pay  for  Japanese  assistance 
in  the  war,  why  did  they  not  pay  it  on  their  own 
account  ? 

The  whole  transaction  becomes  absolutely  revolt- 
ing when  it  is  remembered  that  the  Allied  promises 


THE  ALLIED  SECRET  AGREEMENTS  77 

were  given  not  as  a  price  for  Japan's  further  assist- 
ance in  the  war,  but  as  a  douceur  for  withdrawing 
her  objection  to  China's  coming  into  the  rank  of  the 
Allied  Powers.  Great  Britain,  Russia,  France  and 
Belgium  in  particular  desired  China  to  come  to  their 
assistance ;  but  Japan  objected.  Now,  to  remove  this 
objection,  they  (Belgium  not  included)  sought  to 
placate  Japan  by  complying  with  her  sinister 
demand  at  the  expense  of  China.  In  other  words, 
they  were,  on  the  one  hand,  anxious  to  make  imme- 
diate use  of  the  opportunities  and  privileges  which 
China's  coming  into  the  war  would  afford,  and  on 
the  other,  they  were  unscrupulous  enough  to  sacrifice 
her  to  hasten  the  realisation  of  their  ambition.  For 
international  bad  faith  and  treachery,  this  secret 
understanding  between  Japan  and  the  Allied  Powers 
will  remain  unsurpassed. 

We  can  do  no  better  than  to  quote  the  despatch 
which  M.  Krupensky,  Russian  Ambassador  at  Tokio, 
sent  to  his  Government,  on  February  8,  1917 : 

*  *  I  never  omit  an  opportunity  for  representing  to  the  Minister 
for  Foreign  Affairs  the  desirability,  in  the  interests  of  Japan 
herself,  of  China's  intervention  in  the  war,  and  only  last  week 
I  had  a  conversation  with  him  on  the  subject.  To-day  I  again 
pointed  out  to  him  that  the  present  moment  was  particularly 
favourable,  in  view  of  the  position  taken  up  by  the  United 
States  and  the  proposal  made  by  them  to  the  neutral  Powers 
to  follow  their  example,  and  more  particularly,  in  view  of  the 
recent  speeches  of  the  American  Minister  at  Peking.  Viscount 
Motono  replied  that  he  would  be  the  first  to  welcome  a  rupture 
between  China  and  Germany,  and  would  not  hesitate  to  take 
steps  in  this  direction  at  Peking  if  he  were  sure  that  the  Chinese 
Government  would  go  in  that  direction.  So  far,  however,  he 
had  no  such  assurance,  and  he  feared  lest  unsuccessful  repre- 
sentations at  Peking  might  do  harm  to  the  Allies.  He  prom- 
ised me  to  sound  the  attitude  of  Peking  without  delay,  and, 


78  THE  SHANTUNG  QUESTION 

in  case  of  some  hope  of  success,  to  propose  to  the  Cabinet  to 
take  a  decision  in  the  desired  direction. 

"On  the  other  hand,  the  Minister  pointed  out  the  necessity 
for  him,  in  view  of  the  attitude  of  Japanese  public  opinion  on 
the  subject,  as  well  as  with  a  view  to  safeguard  Japan's  position 
at  the  future  Peace  Conference,  if  China  should  be  admitted  to 
it,  of  securing  the  support  of  the  Allied  Powers  to  the  desires 
of  Japan  in  respect  of  Shantung  and  the  Pacific  Islands.  These 
desires  are  for  the  succession  to  all  the  rights  and  privileges 
hitherto  possessed  by  Germany  in  the  Shantung  Province  and 
for  the  acquisition  of  the  islands  to  the  North  of  the  Equator 
which  are  now  occupied  by  the  Japanese.  Montono  plainly  told 
me  that  the  Japanese  Government  would  like  to  receive  at  once 
the  promise  of  the  Imperial  Russian  Government  to  support  the 
above  desires  of  Japan.  In  order  to  give  a  push  to  the  highly 
important  question  of  a  break  between  China  and  Germany  I 
regard  it  as  very  desirable  that  the  Japanese  should  be  given  the 
promise  they  ask.  This  is  the  more  important  as  the  relations 
between  Great  Britain  and  Japan,  as  far  as  can  be  seen  here, 
have  of  late  been  such  as  to  justify  a  surmise  that  the  Japanese 
aspirations  would  not  meet  with  any  objections  on  the  part  of 
the  London  Cabinet." 

NOTE. — The  Paris  Peace  Conference  has  become 
history  and  these  secret  agreements  about  Shantung 
have  become  things  of  the  past.  It  is  always  refresh- 
ing, however,  to  read  that  vigorous  editorial  leader, 
which  The  New  York  Times  published,  April  23, 
1919,  under  the  caption,  "The  Secret  Treaties,"  and 
which  we  reproduce  in  the  following : 

THE  SECRET  TREATIES 

The  interests  involved  in  the  Adriatic  dispute  over  a  few  miles 
of  rocky  coast  and  a  single  city  seem  petty  and  negligible  when 
compared  with  the  consequences  of  the  decision  to  be  taken  in 
the  Far  East,  where  the  liberty,  the  right  of  self-determination, 
and  the  national  destiny  of  400,000,000  people  depend  upon  the 
action  of  the  Peace  Conference.  Like  Italy  and  Jugoslavia, 
Japan  is  firm  and  insistent,  while  the  Chinese,  lacking  the  power 


THE  ALLIED  SECRET  AGREEMENTS  79 

and  privilege  of  self-assertion  which  may  be  permanently  denied 
to  them  by  the  settlement  of  the  issue,  must  depend  upon  the 
righteousness  of  their  cause,  upon  the  sense  of  international 
justice  and  regard  for  the  principles  of  an  enduring  peace  so 
constantly  and  openly  professed  by  the  members  of  the  Con- 
ference. 

It  was,  indeed,  an  " awkward  moment";  it  was  a  moment  of 
time  vital  to  the  decision  between  the  continuance  of  the  old 
tradition  and  the  rise  of  the  new  way  in  diplomacy  and  interna- 
tional relations  which  was  forced  upon  the  Conference  when 
Mr.  Wilson's  question  brought  to  light  the  secret  treaties  by 
which  Great  Britain,  France,  Russia,  and  Italy,  just  at  the  time 
when  we  were  breaking  off  diplomatic  relations  with  Germany, 
pledged  their  support  to  the  demands  Japan  proposed  to  make 
at  the  Peace  Conference  that  she  be  recognised  as  the  lawful 
successor  of  Germany's  rights  in  the  Chinese  Province  of  Shan- 
tung, and  that  possession  of  the  German  islands  north  of  the 
Equator  be  assured  to  her.  Japan  had  opposed  the  wish  of 
China  to  join  the  Allies  in  the  war,  her  assent  was  given  on  the 
terms  she  laid  down  in  the  secret  treaties. 

The  reason  for  her  opposition  to  the  declaration  of  war  by 
China  and  her  insistence  upon  a  secure  foothold  in  Shantung 
is  all-important.  It  is  immeasurably  important  for  China,  for 
the  whole  future,  the  national  existence  of  that  republic  was 
then,  and  is  now,  in  the  balance.  It  is  to  the  last  degree 
important  as  a  test  of  the  sincerity  of  the  adhesion  of  the  asso- 
ciated nations  to  the  fourteen  principles  of  Mr.  Wilson;  it  is 
important  to  the  verdict  of  history  upon  the  question  whether 
the  Peace  Conference  of  Paris  in  the  year  1919  was  governed  in 
its  decisions  altogether  or  only  in  part  by  a  spirit  differing  from 
that  which  actuated  the  Congress  of  Vienna  a  little  more  than 
one  hundred  years  earlier. 

Japan's  reason  and  her  motives  were  frankly  disclosed  in 
November,  1915,  when,  in  response  to  what  she  believed  to  be 
the  desire  of  the  European  Powers,  China  sought  to  enter  the 
war.  " Japan,"  said  Baron  Ishii,  the  Japanese  Minister  of 
Foreign  Affairs,  to  the  European  Ambassadors  at  Tokio,  "  could 
not  view  without  apprehension  the  moral  awakening  of  400,- 
000,000  Chinese  which  would  result  from  their  entering  the 
war."  It  was  to  forestall  that  awakening  that  Japan  would 
retain  her  hold  in  Shantung.  We  may  put  aside  the  pledges  and 
assurances  given  by  Japan  at  the  time  she  wrested  the  leased 


80  THE  SHANTUNG  QUESTION 

territory  of  Kiaochow  from  Germany — she  declared  in  her 
ultimatum  to  Germany  that  it  was  ''with  a  view  to  eventual 
restoration  of  the  same  to  China."  We  may  pass  over  Count 
Okuma's  statement  that  his  Government  would  take  "no  such 
action  as  to  give  a  third  party  any  cause  for  anxiety  or  uneasi- 
ness regarding  the  safety  of  their  territories  or  possessions." 
We  may  leave  out  of  account  Okuma's  telegraphed  message  to 
the  American  people  that  in  ousting  the  Germans  from  Kiao- 
chow "Japan  has  no  ulterior  motive,  no  desire  to  secure  more 
territory. ' '  We  need  not  dwell  upon  the  Root-Takahira  and  the 
Lansing-Ishii  agreements,  in  both  of  which  Japan  pledged  her- 
self to  respect  the  independence  and  territorial  integrity  of 
China.  All  these  things  belong  to  the  past. 

But  the  Conference  and  the  whole  world  are  deeply  concerned 
in  the  determination  to  be  reached  which  will  control  the  destiny 
of  400,000,000  people  in  the  Far  East.  Is  "the  moral  awaken- 
ing of  400,000,000  Chinese"  to  be  hindered  and  forbidden  at  the 
behest  of  a  government  representing  60,000,000  people?  Will 
the  nations  of  the  West  shut  the  door  of  hope  upon  that  innum- 
erable multitude,  will  they  deny  to  the  400,000,000  Chinese  those 
privileges  of  development  and  moral  awakening  by  which  the 
Japanese  have  so  marvellously  benefited?  Shall  China  be 
doomed  to  age-long  darkness  because  of  the  view  of  Japan's  self- 
interest  held  by  a  few  of  her  statesmen  who  happen  to  be  in 
power  ? 

These  are  questions  too  big  in  morals,  too  portentously  charged 
with  perils  for  the  peace  of  the  world,  to  be  excluded  from  the 
consideration  of  the  Peace  Conference  or  to  be  viewed  as  pre- 
determined by  treaties  entered  into  without  the  world's  knowl- 
edge at  a  moment  of  sudden  shift  in  the  fortunes  of  war  due  to 
the  imminence  of  our  resort  to  arms. 

Unfortunately,  the  answer  given  to  the  above  ques- 
tions by  the  statesmen  who  controlled  the  Versailles 
Peace  Conference  was  least  dreamed  of  and  extremely 
disappointing.  They  decided  to  abide  by  the  secret 
understanding  between  Japan  and  the  Allied  Powers ; 
and  by  awarding  Shantung  to  Japan,  they  committed 
a  great  injustice  to  China  and  erected  for  themselves 
a  monument  of  ill  fame,  which  would  forever  testify 


THE  ALLIED  SECRET  AGREEMENTS  81 

their  statesmanship  or  lack  of  it  in  becoming  parti- 
ceps  criminis  of  an  international  outrage.  But  for- 
tunately for  China,  this  injustice  brought  about  the 
" moral  awakening"  of  her  400,000,000  people,  which 
was  feared  by  the  Japanese  statesmen.  The ' '  Student 
Movement, "  which  began  and  gathered  formidable 
strength  after  the  " Shantung  Settlement,"  has  often 
been  given  as  an  eloquent  testimony  of  this  awak- 
ening. 


VIII 

CHINA  AND  THE  WAR 

THE   fact   is   fairly   well-known   to-day  that 
China  would  have  been  an  active  participant 
early  in  the  European  war  had  it  not  been  for 
Japan's  persistent  obstruction. 

"From  the  day  war  was  declared  in  Europe,  Yuan 
Shih-Kai  (then  President  of  China)  without  doubt 
realised  that  China's  war  problem  was  contained  in 
one  word,  Japan,  and  his  astute  mind  was  busy  with 
schemes  to  protect  his  country."  His  first  thought 
was  to  join  the  Allies  in  the  war.  Failing  this,  he 
proposed  that  all  the  Chinese  territories  leased  to  the 
belligerent  Powers  and  others  who  might  thereafter 
become  belligerents  should  either  be  neutralised  or 
placed  under  China's  control.  With  Japan's  en- 
trance into  the  conflict  and  her  decision  to  attack  the 
German  leased  territory  in  Shantung,  the  hope  of 
neutralising  the  foreign  leaseholds  in  China  was 
banished.  According  to  a  contemporary  account, 
President  Yuan  then  proposed  that  China  would 
send  troops  to  participate  in  the  capture  of  Tsingtao 
(which  means  that  China  would  participate  in  the 
war),  and  that  any  military  operations  outside  of  the 
original  German  leased  territory  should  be  entrusted 
to  Chinese  troops.  Whatever  may  be  said  against 
Yuan  Shih-Kai,  there  can  be  no  doubt  that  in  inter- 
national politics  he  was  gifted  with  enough  foresight 

82 


CHINA  AND  THE  WAR  83 

to  see  what  was  coming.  His  offer  to  participate  in 
the  war  was,  therefore,  a  master  stroke  of  diplomacy, 
for  it  would  be  infinitely  better  for  China  to  join  with 
Japan  and  Great  Britain  in  driving  Germany  out  of 
Shantung  than  to  leave  the  task  to  be  performed 
alone  by  these  two  Powers,  with  the  possible  result 
of  being  excluded  from  the  final  settlement.  "This 
proposal  was  communicated  to  Sir  John  N.  Jordan, 
the  British  Minister  at  Peking.  It  appeared  that 
Yuan  Shih-Kai  then  acted  entirely  on  his  own  initia- 
tive, for  even  those  of  his  immediate  entourage  did 
not  know  about  the  proposal  when  it  was  made." 
The  British  Minister  discouraged  such  action  as 
President  Yuan's  proposal  would  naturally  involve. 
The  only  alternative,  then,  was  to  limit  hostile  opera- 
tions on  Chinese  territory  to  specified  areas.  The 
result  was  the  establishment  on  September  3,  1914, 
of  a  special  war  zone  in  Shantung,  within  which  the 
belligerent  Powers  were  to  carry  on  their  military 
operations.* 

Barred  out  in  the  expedition  against  Tsingtao, 
China,  in  November,  1915,  again  tried  to  enter  the 
war  at  the  request  of  the  European  Powers.  The 
fact  that  China  was  bound  to  pay  the  monthly  instal- 
ment of  the  Boxer  Indemnity  to  Germany,  which  was 
largely  spent  by  her  agents  in  anti- Allied  propaganda 
in  China,  and  the  fact  that  Germans  were  free  to 
carry  on  multitudinous  activities  in  a  neutral  China, 
which  were  regarded  as  highly  inimical  to  the  Allied 
interests,  made  the  Ministers  of  the  Allied  Powers  in 
Peking  realise  that  it  was  after  all  better  for  China 
and  for  themselves  that  she  should  join  the  war.  A 

*  Vide,  Appendix  E. 


84  THE  SHANTUNG  QUESTION 

conference  was  held  between  the  British,  French,  and 
Russian  Ministers  in  Peking.  Italy  was  not  invited, 
being  then  not  yet  at  war  with  Germany,  and  Japan 
was  excluded  for  reasons  yet  unknown.  The  result 
of  the  conference  was  that  overtures  were  made  to  the 
Chinese  Government.  But  Yuan  Shih-Kai,  still 
remembering  the  rebuff  he  had  experienced  in  1914, 
replied  with  three  conditions  which  must  be  accepted 
by  the  Allies  before  China  could  accede  to  the  invita- 
tion. They  included  (1)  that  China  was  to  have  a 
sum  of  $10,000,000  from  the  Allies  for  the  purpose 
of  putting  her  arsenals  in  proper  condition,  with  the 
hope  of  doing  her  utmost  to  supply  the  Allies  with 
the  munitions,  (2)  that  no  further  agreements  should 
be  made  among  them  relating  to  China  without  her 
being  consulted,  and  (3)  that  some  arrangement 
should  be  made  whereby  the  foreign  settlement  in 
Shanghai  should  no  longer  be  allowed  to  shelter 
Chinese  criminals  and  revolutionaries.  All  these 
three  conditions  were  accepted  by  the  Allied  Minis- 
ters on  behalf  of  their  Governments.  It  was  then 
decided  upon  that  Tokio  should  be  consulted.  On 
November  23, 1915,  the  ambassadors  of  Great  Britain, 
France  and  Kussia  at  Tokio  waited  upon  Viscount 
Ishii,  the  Japanese  Minister  of  Foreign  Affairs,  and 
asked  him  whether  Japan  would  join  with  their  Gov- 
ernments in  inviting  China  to  enter  the  war  on  the 
side  of  the  Allies.  ' '  On  the  occasion  of  that  audience 
at  Tokio  the  ambassadors  of  the  three  European 
Powers  personally  were  but  slightly  conversant  with 
actual  conditions  in  China,  a  lack  of  knowledge  that 
placed  them  at  a  disadvantage  in  treating  with  Vis- 
count Ishii.  The  three  ambassadors  presented  the 


CHINA  AND  THE  WAR  85 

views  of  their  Governments,  and  some  arguments 
why  China  should  be  asked  to  join  the  Allies.  Vis- 
count Ishii  demurred  both  to  the  proposal  and  to  the 
arguments  that  were  advanced.  He  said  that  Japan 
considered  developments  with  regard  to  China  as  of 
paramount  interest  to  her,  and  she  must  keep  a  firm 
hand  there.  Japan  could  not  regard  with  equanim- 
ity the  organisation  of  an  efficient  Chinese  army  such 
as  would  be  required  for  her  active  participation  in 
the  war,  nor  could  Japan  fail  to  regard  with  uneasi- 
ness a  liberation  of  the  economic  activities  of  a  nation 
of  400,000,000  people." 

According  to  a  despatch  by  Charles  A.  Selden  from 
Paris  to  the  New  York  Times,  April  22,  1919,  Vis- 
count Ishii  was  reported  to  have  said  on  that  occasion 
to  the  European  ambassadors  at  Tokio:  "  Japan 
cannot  view  without  apprehension  the  moral  awaken- 
ing of  400,000,000  Chinese,  which  would  result  from 
their  entering  the  war."  On  April  24,  Viscount 
Ishii,  then  Japanese  Ambassador  to  the  United 
States,  issued,  at  Washington,  a  statement  denying 
the  report.*  It  may  be  said  that,  while  the  reports 
might  vary,  the  truth  remained:  Japan  prevented 
China  from  entering  the  war  at  the  request  of  the 
European  Powers. 

*  Viscount  Ishii's  statement  reads: 

"Was  I  apprehensive  of  the  moral  awakening  of  the  four  hundred  mil- 
lion Chinese?  The  idea  is  fantastic.  It  is  to  effect  this  very  awakening 
of  the  Chinese  that  Japan  has  been  putting  forth  all  efforts  for  these 
many  years;  sending  professors  to  China  and  welcoming  Chinese  students 
to  Japan.  So  long  as  China  remains  in  a  state  of  lethargy,  she  is  in 
danger  of  her  existence.  And  that  danger  is  at  the  same  time  Japan's 
danger.  Japan's  security  lies  in  the  awakening  and  rising  to  power  of 
China. 

"But  inducing  China  to  participate  in  the  war  of  1915  was  another 
affair,  which  I  could  not  in  conscience  indorse.  China  was  then  passing 


86  THE  SHANTUNG  QUESTION 

On  January  31,  1917,  the  German  Government,  in 
a  note  to  the  Chinese  Minister  at  Berlin,  asserted  that 
it  was  obliged  to  do  away  with  restrictions  upon  her 
naval  policy  and  to  begin  on  the  following  day,  Feb- 
ruary 1,  the  so-called  ruthless  submarine  warfare. 
On  February  4,  the  American  Minister  in  Peking 
informed  the  Chinese  Government  that  the  United 
States,  in  view  of  the  renewal  of  indiscriminate  sub- 
marine warfare,  had  "no  alternative  but  to  pursue 
the  course  laid  down  in  its  note  to  the  German  Gov- 
ernment on  April  18th,  1916" — to  sever  diplomatic 
relations  with  Germany.  The  Chinese  Government 
was  invited  uto  take  action  similar  to  that  taken  by 
the  Government  of  the  United  States."  On  Febru- 
ary 9,  the  Chinese  Government  protested  against  the 
renewal  of  the  indiscriminate  submarine  warfare, 
and  asserted  that  if  its  protest  should  prove  ineffec- 
tual, it  would  be  constrained  to  sever  diplomatic  rela- 
tions with  Germany.  No  reply  was  received  from 

through  a  most  critical  period.  Yuan  Shih-kai,  President  of  the  young 
republic,  who  was  fitly  called  the  Huerta  of  China,  had  just  started  his 
monarchical  movement  and  sought  to  nip  China's  new-born  liberty  in  the 
bud  by  assuming  the  title  of  Emperor,  with  all  that  that  title  meant  in 
China.  An  armed  opposition  had  sprung  up  in  Yunnan  and  was  gathering 
strength  from  day  to  day. 

"The  whole  country  was  on  the  verge  of  revolution  and  anarchy.  China 
was,  moreover,  utterly  destitute  of  arms  and  ammunition.  What  could 
we  expect  from  her  in  such  a  condition? 

"The  military  value  to  the  Entente  of  the  proposed  Chinese  participation 
was  almost  nil.  The  mere  fact  of  a  declaration  of  war  by  China  would 
have  immensely  added  to  the  excitement  of  the  people,  and  rendered  con- 
fusion worse  confounded  throughout  the  whole  country.  The  greatest 
sufferer  from  such  a  condition  in  China  would  be,  next  after  China  herself, 
her  neighbour,  Japan.  Again,  from  a  humanitarian  point  of  view,  it 
was  the  duty  of  every  belligerent  to  endeavour  to  restrict  the  spheres  of 
war  calamity,  unless  substantial  military  advantage  were  to  accrue  from 
their  extension. 

"I  know  my  successor  at  the  Foreign  Office,  Tokio,  took  two  years  later 
a  different  view  on  this  question.  He  had  probably  his  own  reason  in 
the  presence  of  the  changed  situation." 


CHINA  AND  THE  WAR  87 

Germany  until  March  10,  and  on  March  14,  China 
gave  the  German  Minister  in  Peking  his  passport 
and  recalled  the  Chinese  Minister  at  Berlin. 

The  severance  of  diplomatic  relations  was  followed 
by  five  months  of  agitation  for  and  against  China's 
entrance  in  the  war.  Having  repeatedly  failed  to 
take  part  in  the  struggle,  China  was  now  confronted 
with  the  real  opportunity  of  joining  the  Allied 
Powers.  Unfortunately,  however,  there  was  a  seri- 
ous difference  of  opinion  among  the  political  leaders 
in  China  as  to  the  wisdom  of  her  participation — a 
difference,  which  finally  grew  into  civil  strife.  But 
the  Powers  who  were  anxious  to  drag  China  into  the 
conflict  were  relentless  in  their  effort.  Great  Britain 
and  France  had  three  obvious  purposes  in  view :  To 
eradicate  German  influence  in  the  Far  East,  to  secure 
the  use  of  German  boats  interned  in  the  Chinese 
waters,  and  to  draw  upon  China's  limitless  man- 
power. To  the  United  States,  the  question  of 
China's  participation  in  the  war  was  of  less  impor- 
tance than  her  internal  peace.  But  the  American 
Minister  in  Peking,  according  to  all  contemporary 
accounts,  was  more  enthusiastic  than  the  Government 
which  he  represented  in  getting  China  into  the  war. 
He  seemed  to  have  considered  it  as  a  personal 
triumph  or  failure  according  as  he  succeeded  or 
failed  to  persuade  Premier  Tuan  Chi-jui  to  push 
through  the  war  declaration.  The  " flying  wedge" 
which  he  started  cut  deep  into  the  internal  politics  of 
China,  and  the  result  was  that  before  China  could 
join  the  Allies  in  Europe  war  was  started  at  home. 

War  or  no  war,  China  was  not  her  own  mistress.  It 
is  most  painful  to  admit  that  the  decisive  voice  was 


88  THE  SHANTUNG  QUESTION 

to  be  heard,  not  from  Peking,  but  from  Tokio. 
Japan  had  opposed  China's  declaration  of  war  upon 
Germany,  being  afraid  of  the  "  moral  awakening "  of 
the  four  hundred  millions  of  her  people.  With  the 
conclusion  of  the  secret  agreements  with  the 
European  Powers  as  to  the  disposition  of  the  German 
possessions  in  the  Pacific  and  German  rights  in 
Shantung,  Japan  had  undergone  a  radical  change  of 
her  policy.  She  was  now  not  only  not  opposed  to 
China's  coming  into  the  conflict,  but  also  ready  to 
encourage  it.  With  the  Allied  Powers  now  working 
in  a  unison,  it  was  perhaps  easy  to  direct  the  Chinese 
ship  of  state  to  the  coarse  they  wanted.  Thus,  on 
August  14,  by  a  Presidential  Mandate,  a  state  of  war 
was  declared  to  exist  between  China  and  Germany. 

The  question  at  once  arose  as  to  whether  or  not  the 
declaration  of  war  by  China  ipso  facto  abrogated  the 
Convention  of  March  6,  1898,  under  which  Germany 
held  the  lease  of  Kiaochow  Bay  from  China  and  all 
the  rights  and  privileges  in  the  territory.  From  the 
standpoint  of  law  and  treaty,  the  disposal  of  the 
Kiaochow  leased  territory  was  necessarily  narrowed 
to  this  issue.  If  the  lease  was  not  abrogated  by 
China's  participation  in  the  war,  then  it  was  merely 
suspended  for  the  duration  of  the  war  and  revived 
on  the  restoration  of  peace.  The  settlement  of  this 
question  of  German  leased  territory  in  Shantung, 
then,  should  be  one  between  China  as  the  lessor,  Ger- 
many as  the  lessee,  and  Japan  as  the  military  occu- 
pant. In  other  words,  China  should  be  consulted  in 
the  disposition  of  the  territory,  and  it  was  an 
egregious  mistake  on  the  part  of  the  Peace 
Conference  at  Versailles  to  dispose  of  it  without 


CHINA  AND  THE  WAR  89 

referring  to  the  views  and  wishes  of  China.  On  the 
other  hand,  if  the  lease  was  abrogated,  then  there 
could  be  but  one  lawful  settlement :  to  return  the  ter- 
ritory to  China  unconditionally.  In  that  case, 
Germany  ceased  to  be  the  lessee  or  to  have  any  right 
to  the  territory,  and  Japan  was  occupying  the  terri- 
tory, not  of  her  enemy,  but  of  her  friend,  and  co- 
belligerent. 

But  the  question  remains  yet  unanswered:  Did 
China 's  declaration  of  war  abrogate  the  German  lease 
Convention  ? 

The  general  rule  of  International  Law  is  that  war 
terminates  all  existing  treaties  between  belligerent 
Powers,  except  such  as  relate  to  boundaries,  to  the 
tenure  of  property,  to  public  debts,  etc.,  which  are 
permanent  in  their  nature.*  Treaties  are  generally 
divided  into  two  classes :  transitory  conventions  and 
treaties.  The  former  cannot  be  annulled  by  a  sub- 
sequent war  between  the  contracting  parties,  while 
the  latter  are  voidable.  "  There  is  a  very  important 
difference  between  transitory  covenants  and  treaties, 
with  respect  to  their  duration,"  says  Martens. 
"When  once  a  transitory  covenant  has  been  fulfilled, 
and  has  been  continued  on  afterwards  without  being 
renewed,  or  its  future  duration  has  been  defined  by 
the  contracting  parties,  it  still  continues  in  force.  No 
changes  that  may  take  place  afterwards  as  to  the 
person  of  the  sovereign,  the  form  of  government,  or 
the  sovereignty  of  the  state  can  in  the  least  impair  the 
validity  of  the  covenant  while  it  is  observed  on  the 

*  It  is  understood,  of  course,  that  treaties,  or  stipulations  in  treaties, 
having  sole  reference  to  the  exercise  of  belligerent  rights,  or  meant  to  be 
operative  only  in  case  of  war,  cannot  be  abrogated  by  a  declaration  of  war. 
On  the  contrary,  they  come  into  force  upon  the  outbreak  of  hostilities. 


90  THE  SHANTUNG  QUESTION 

other  side.  If  a  war  even  should  break  out  between 
the  contracting  parties,  the  covenant  does  not,  on  that 
account  merely,  become  entirely  null,  although  the 
effects  of  it  may  be  suspended  during  the  war. ' '  Pro- 
fessor John  Bassett  Moore,  one  of  the  leading 
international  jurists  in  the  United  States,  says :  "By 
a  classification  originating  with  the  earlier  publicists, 
and  often  repeated  by  their  successors,  treaties  have 
been  divided  into  two  classes — pacta  transitoria,  or 
4 transitory  conventions',  as  the  words  have  been 
unfortunately  translated,  and  *  treaties'  properly 
so-called.  In  the  former  class  were  included  inter- 
national compacts  by  which  a  status  was  permanently 
established,  or  a  right  permanently  vested;  and,  in 
the  latter,  compacts  which  looked  to  future  action, 
and  the  execution  of  which  presupposed  the  continu- 
ance of  a  state  of  peace  between  the  contracting 
parties." 

An  equally  sound  doctrine  is  that  of  Calvo,  the 
well-known  Latin  American  jurist,  who  maintains 
that  the  effect  of  the  declaration  of  war  upon  treaty 
"depends  naturally  upon  the  particular  character  of 
the  engagements  contracted."  "Thus  all  are  agreed 
in  admitting  the  rupture  of  conventional  ties  con- 
cluded expressly  with  a  view  to  a  state  of  peace,  of 
those  whose  special  object  is  to  promote  relations  of 
harmony  between  nation  and  nation,  such  as  treaties 
of  amity,  of  alliance,  and  other  acts  of  the  same 
nature  having  a  political  character.  As  to  customs 
and  postal  arrangements,  conventions  of  navigation 
and  commerce,  and  agreements  relative  to  private 
interests,  they  are  generally  considered  as  suspended 
till  the  cessation  of  hostilities.  By  necessary  conse- 


CHINA  AND  THE  WAR  91 

quence,  it  is  a  principle  that  every  stipulation  written 
with  reference  to  war,  as  well  as  all  clauses  described 
as  perpetual,  preserve  in  spite  of  the  outbreak  of 
hostilities  their  obligatory  force  so  long  as  the 
belligerents  have  not,  by  common  accord,  annulled 
them  or  replaced  them  with  others." 

While  forbearing  to  cite  many  other  authorities 
on  the  same  subject,  we  may  quote  the  general  prin- 
ciple which  Professor  John  Bassett  Moore  lays 
down:  " There  was  a  recognition  of  the  principle, 
which  is  now  received  as  fundamental,  that  the  ques- 
tion whether  the  stipulations  of  a  treaty  are  annulled 
by  war  depends  upon  their  intrinsic  character.  If 
they  relate  to  a  right  which  the  outbreak  of  war  does 
not  annul,  the  treaty  itself  remains  unannulled." 

In  accordance  with  the  distinction  thus  drawn,  it 
may  be  said  as  a  general  rule  of  International  Law 
that,  treaties  which  are  transient  in  character  and 
look  to  the  continuance  of  a  state  of  peace  for  their 
enforcement,  are  usually  considered  as  having  been 
dissolved  by  subsequent  war  between  the  contracting 
parties,  while  those  of  a  permanent  and  irrevocable 
nature  are  regarded  as  merely  suspended  for  the 
duration  of  the  war.  Was  the  Convention  of  March 
6,  1898,  under  which  Kiaochow  was  leased  to  Ger- 
many for  ninety-nine  years,  permanent  and  irrev- 
ocable in  its  nature,  or  did  it  settle  anything 
permanently  ?  The  fact  that  it  was  only  a  ninety-nine 
year  lease  is  sufficient  to  show  its  temporary  char- 
acter. The  second  article  of  the  Convention 
stipulated:  "With  the  intention  of  meeting  the 
legitimate  desire  of  His  Majesty  the  German 
Emperor,  that  Germany,  like  other  Powers,  should 


92  THE  SHANTUNG  QUESTION 

hold  a  place  on  the  Chinese  coast  for  the  repair  and 
equipment  of  her  ships,  for  the  storage  of  materials 
and  provisions  for  the  same,  and  for  other  arrange- 
ments connected  therewith,  His  Majesty  the  Emperor 
of  China  leases  to  Germany,  provisionally  for  ninety- 
nine  years,  both  sides  of  the  entrance  to  the  Bay  of 
Kiaochow."*  It  seems  evident,  therefore,  that  the 
Kiaochow  Convention  was  not  a  permanent  or  per- 
petual agreement  and  it  did  not  settle  anything 
permanently  or  irrevocably.  And  as  such  it  was 
abrogated  by  China's  declaration  of  war.  Those  who 
have  held  the  contrary  have  evidently  understood  the 
ninety-nine  years  lease  as  an  absolute  cession.  It  is, 
however,  important  to  remember  that,  in  leasing  the 
territory  to  Germany,  China  reserved  to  herself  "all 
rights  of  sovereignty  in  the  zone."  It  could  not  be 
an  absolute  cession,  therefore. 

Again,  war  is  a  hostile  measure  which  terminates 
all  the  usual  friendly  relations  between  states  All 
treaties  of  amity  are  ipso  facto  abrogated  by  a  sub- 
sequent war  between  the  contracting  parties.  In  this 
case,  the  lease  was  granted  to  Germany  by  China 
with  the  avowed  intention  of  strengthening  their 
friendly  relations.  The  Convention  so  asserted  in  its 
preamble :  ' '  The  incidents  connected  with  the  mis- 
sion in  the  prefecture  of  Tsao-chow-fu,  in  Shantung, 
being  now  closed,  the  Imperial  Chinese  Government 
considers  it  advisable  to  give  a  special  proof  of  their 
grateful  appreciation  of  the  assistance  rendered  to 
them  by  Germany.  The  Imperial  German  and  the 
Imperial  Chinese  Governments,  therefore,  inspired 
by  the  equal  and  mutual  wish  to  strengthen  the  bonds 

*  Vide  Appendix  A. 


CHINA  AND  THE  WAR  93 

of  friendship  which  unite  the  two  countries,  and  to 
develop  the  commercial  relations  between  the  sub- 
jects of  the  two  States,  have  concluded  the  following 
separate  convention."  No  matter  how  ironical  the 
wording  of  the  preamble  or  how  little  truth  there  was 
in  its  assertions,  it  was  nevertheless  a  treaty  of  amity, 
and  as  such  it  was  undoubtedly  abrogated  by  the  war. 
As  has  been  pointed  out  in  the  above,  the  question 
whether  the  stipulations  of  a  treaty  are  annulled  by 
war  depends  upon  their  intrinsic  character.  In 
accordance  with  this  principle,  the  Lease  Convention 
was,  it  may  be  said,  of  such  intrinsic  character  that 
the  outbreak  of  hostilities  between  China  and  Ger- 
many was  sure  to  annul.  In  the  first  place,  it  should 
be  noted  that,  by  virtue  of  the  third  article  of  the 
Lease  Convention,  China  refrained  from  exercising 
her  "  rights  of  administration  in  the  leased  territory 
during  the  term  of  the  lease"  and  granted  the  exer- 
cise of  them  to  Germany.  Upon  the  outbreak  of  war, 
it  would  be  easy  to  imagine  that  the  continuance  by 
Germany  to  exercise  these  jurisdictional  rights  on 
the  territory  of  China  would  be  highly  inimical  to  her 
own  safety.  It  was  not  only  right,  but  very  natural, 
therefore,  that  China,  in  consideration  of  the 
intrinsic  character  of  this  stipulation,  should  insist 
that  it  was  annulled  by  her  declaration  of  war. 
"  Since  it  is  lawful  to  take  possession  of  whatever 
belongs  to  the  enemy  government,  with  greater  rea- 
son it  is  proper  to  deprive  it  of  the  rights  which  grow 
out  of  the  treaties."  Furthermore,  according  to  the 
second  article  of  the  Lease  Convention,  Germany  was 
given  the  right  "to  construct,  at  a  suitable  moment, 
on  the  territory  thus  leased,  fortifications  for  the 


94  THE  SHANTUNG  QUESTION 

protection  of  the  buildings  to  be  constructed  there 
and  of  the  entrance  to  the  harbour. ' '  In  other  words, 
Germany  enjoyed  the  right  of  fortification,  which 
would  mean  that,  upon  the  outbreak  of  hostilities, 
Germany  could  use  the  leased  territory  as  a  base  of 
operation  against  China  herself,  if  the  Convention 
were  allowed  to  stand.  This  was  absolutely  unthink- 
able. In  view  of  these  two  stipulations,  therefore, 
it  is  easy  to  see  why  the  Lease  Convention  should  be 
abrogated  upon  China's  declaration  of  war. 

This  was  the  position  of  the  Chinese  Government. 
In  fact,  the  Chinese  Government  had  so  stated  in  its 
declaration  of  war  on  Germany  and  in  its  communi- 
cations to  the  Allied  Powers.  The  Presidential 
mandate  of  August  14,  1917,  declaring  the  existence 
of  a  state  of  war  from  then  on,  said :  "  In  consequence 
thereof,  all  treaties,  agreements,  and  conventions, 
heretofore  concluded  between  China  and  Germany, 
and  between  China  and  Austria-Hungary,*  as  well 
as  such  parts  of  the  international  protocols  and  inter- 
national agreements  as  concern  only  the  relations 
between  China  and  Germany  and  between  China  and 
Austria-Hungary  are,  in  conformity  with  the  Law 
of  Nations  and  international  practice,  hereby  abro- 
gated." The  abrogation  of  these  treaties,  agree- 
ments, and  conventions  with  Germany  (and  Austria- 
Hungary)  was  communicated  by  the  Chinese  Minis- 
ter of  Foreign  Affairs  to  the  diplomatic  representa- 
tives of  the  Allied  and  neutral  Powers  in  Peking,  in 


*  China  declared  war  on  Austria-Hungary,  by  the  same  Presidential 
mandate,  on  the  ground  that  "it  is  not  Germany  alone,  but  Austria- 
Hungary  as  well,  which  has  adopted  and  pursued  this  policy  (of  ruthless 
submarine  warfare)  without  abatement."  For  the  Presidential  mandate, 
vide  Appendix  G. 


CHINA  AND  THE  WAR  95 

a  circular  note  of  August  14.    All  admitted  this  fact, 
and  none  raised  any  objection. 

The  point  which  we  should  emphasise  in  particular 
here  is  that,  with  the  abrogation  of  the  Lease  Con- 
vention, the  territory  held  by  Germany  under  it 
reverted  back  to  China,  and  that  with  the  reversion 
of  the  leased  territory  to  China,  one  of  the  principal 
objects  of  the  Chino- Japanese  treaties  of  1915,  grow- 
ing out  of  the  Twenty-one  Demands,  disappeared.  It 
is  a  well  recognised  principle  of  International  Law 
that  a  treaty  becomes  null  and  void  when  its  object 
or  one  of  its  objects  ceases  to  exist.  The  abrogation 
of  the  Lease  Convention  and  other  agreements  with 
Germany  spelled  the  end  of  all  German  rights  and 
concessions  in  China.*  Mr.  Robert  Lansing,  former 
Secretary  of  State  of  the  United  States  and  one  of  the 
American  Commissioners  to  negotiate  peace  with 
Germany,  held  that  the  extinguishment  of  the 
lease  upon  China's  declaration  of  war  was  at  once 
a  moral  and  legal  ground  for  the  Chinese  Government 
to  take.  " Morally  and  legally,"  he  observed,  "the 
Chinese  Government  was  right  in  denouncing  the 
treaty  and  agreements  with  Germany  and  in  treating 
the  territorial  rights  acquired  by  coercion  as  extin- 
guished." "This  view  of  the  extinguishment  of  the 
German  rights  in  Shantung  was  manifestly  the  just 
one  and  its  adoption  would  make  for  the  preservation 
of  permanent  peace  in  the  Far  East." 

*  Cf.  author's  The  Chino- Japanese  Treaties  of  May  25,  1915,  Chapter  VI. 


IX 

THE  SECRET  AGREEMENTS  OF  1918 

ASIDE  from  the  secret  understandings  and 
agreements  which  Japan  and  her  associates 
in  the  war  had  entered  into  about  the  dis- 
position of  the  Shantung  question  at  the  forthcoming 
peace  conference,  there  were,  unfortunately,  still 
other  entanglements,  of  which  China  was  her  own 
architect.  They  were  the  diplomatic  notes  exchanged, 
September  24,  1918,  between  the  Chinese  Minister  at 
Tokio  and  the  Japanese  Minister  of  Foreign  Affairs, 
which  were  no  less  damaging  to  China's  cause  at  the 
Versailles  Peace  Conference,  but  more  plausible  from 
the  Japanese  standpoint,  in  view  of  the  fact  that  they 
were  signed  by  China's  own  accredited  diplomatic 
representative  at  Tokio. 

There  were,  in  all,  six  notes,*  exchanged  under  the 
same  date,  between  Tsung-hsiang  Chang,  the  Chinese 
Minister  at  Tokio  and  Baron  Shimpei  Goto,  the  Jap- 
anese Minister  of  Foreign  Affairs.  The  first  two 
related  to  the  construction  of  two  railways  in  Shan- 
tung, between  Tsinan  and  Shunteh  and  between 
Kaomi  and  Hsu-chow.  With  "an  authorisation" 
from  his  Government,  the  Chinese  Minister  stated 
that  China  had  decided  "to  obtain  loans  from  Jap- 
anese capitalists  for  the  purpose  of  constructing  the 
railways  connecting  points"  as  mentioned,  and  to 
give  Japan  the  right  of  preference  to  other  "suitable 

*  Vide  Appendix  H. 


THE  SECRET  AGREEMENTS  OF  1918  97 

lines "  in  Shantung,  if  the  above-mentioned  two  rail- 
ways were  deemed  "to  be  disadvantageous  from  the 
point  of  view  of  railway  enterprise."  The  Japanese 
Government  was  called  upon  to  take  "the  necessary 
steps  to  cause  Japanese  capitalists  to  agree  to  enter 
into  negotiations  for  loans  on  the  same." 

On  the  same  day,  September  24,  1918,  a  pre- 
liminary contract  for  the  construction  of  the  two  said 
railways  was  entered  into  between  the  Chinese  Min- 
ister, and  Mr.  A.  Ono,  representing  the  Japanese 
Industrial  Bank,  the  Taiwan  Bank,  and  the  Bank  of 
Chosen,  whereby  the  Chinese  Government  undertook 
to  issue  "Gold  Bonds  of  the  Two  Railways"  to  expire 
at  the  end  of  forty  years,  dating  from  the  day  of 
issue.  The  total  amount  required  for  the  construc- 
tion was  not  determined,  but  according  to  a  statement 
issued  by  the  Japanese  Government,  October  1,  1918, 
70,000,000  yen  was  mentioned  as  the  necessary 
amount.  Article  IX  of  the  contract  was  easily  the 
most  important.  It  stipulated:  "On  the  conclusion 
of  this  preliminary  contract,  the  Banks  will  advance 
to  the  (Chinese)  Government  20,000,000  yen  in  the 
full  amount  without  any  discount  whatsoever." 

In  this  connection,  it  may  be  proper  to  add  that  in 
1917  and  1918  Japan  had  made  numerous  loans  to 
China,  the  proceeds  of  which  were  mainly  used  for 
the  purpose  of  carrying  on  the  civil  war.  It  has  gen- 
erally been  believed  that,  among  the  immediate 
reasons  for  the  signing  of  the  preliminary  contract 
was  the  anxiety  of  the  Peking  Government  to  secure 
the  necessary  funds  in  order  to  be  able  to  hold  out 
against  the  South.  The  sum  of  20,000,000  yen 
promised  in  the  preliminary  contract  was  a  timely 


98  THE  SHANTUNG  QUESTION 

relief.  The  Peking  Government  was  dominated  then 
by  Premier  Tuan  Chi-jui,  who,  on  his  own  responsi- 
bility, "  authorised "  the  Chinese  Minister  at  Tokio 
to  enter  into  negotiations  for  the  railway  loan.  The 
fact  that  such  a  contract  had  been  entered  into  by  the 
Chinese  Minister  and  the  representative  of  Japanese 
Banks  was  not  generally  known  even  to  the  cabinet 
members  of  the  Chinese  Government.  The  question 
may  well  be  raised  as  to  whether  or  not  the  Chinese 
Minister  at  Tokio  had  the  necessary  power  to  enter 
into  such  a  contract.  It  is  a  recognised  rule  of  Inter- 
national Law  that  a  treaty  is  not  binding  upon 
the  state  if  its  diplomatic  representative  exceeds 
his  authority  or  violates  his  instructions.  "Such 
engagements,  when  made  without  express  authority, 
or  beyond  the  limits  of  such  as  may  be  reasonably 
inferred,  are  called  sponsions,  and  are  not  binding 
until  confirmed  either  by  express  or  tacit  ratifica- 
tion," said  Hannis  Taylor,  the  well-known  American 
authority  on  International  Law.  Or,  as  Martens 
expressed  it:  "Whatever  the  chief  or  the  inferior 
promises  beyond  the  limits  of  the  authority  intrusted 
to  him  is  only  a  simple  sponsion  which  nothing  but  a 
subsequent  ratification,  either  express  or  implied  on 
the  part  of  the  nation,  can  render  obligatory."  It 
would  seem  that  the  above  railway  contract  was  a 
simple  sponsion.  It  was  concluded  by  the  Chinese 
Minister  at  Tokio  without  due  authority  from  his 
Government,  and  it  was  never  duly  ratified  by  the 
Chinese  Government  after  its  conclusion. 

Much  more  damaging  in  effect,  however,  were  the 
other  two  notes,  in  which  the  Chinese  Minister 
engaged  to  make  the  Kiaochow-Tsinan  Railway  a 


SECRET  AGREEMENTS  OF  1918       99 

Chino- Japanese  joint  enterprise  and  to  employ  Jap- 
anese at  the  headquarters  of  the  railway  police  and 
at  the  police  training  school,  in  return  for  the  with- 
drawal of  Japanese  troops  and  for  the  abolition  of 
the  civil  administration  which  Japan  had,  contrary  to 
the  principles  of  International  Law  and  against 
vigorous  protests  by  the  Chinese  Government,  estab- 
lished in  the  Shantung  province.* 

It  may  be  recalled  that,  on  November  19,  1914, 
upon  the  capture  of  Tsingtao,  Japan  established  her 
military  administration  in  the  German  leased  terri- 
tory. This  regime  was  continued  for  almost  three 
years.  On  October  1,  1917,  an  Imperial  Ordinance 
was  issued  by  the  Japanese  Government,  establishing 
regulations  for  the  division  of  civil  administration  in 
the  Tsingtao  garrison.  The  division  of  civil  admin- 
istration thus  established  extended  to  Litsun,  to 
Fangtze,  and  in  fact,  to  all  Eastern  parts  of  Shan- 
tung. The  Chinese  Government  protested  against 
this  outrageous  disregard  of  its  territorial  sover- 
eignty and  violation  of  the  recognised  principles  of 
International  Law.  The  protest  fell  upon  deaf  ears. 
The  Chinese  delegation  at  the  Peace  Conference  at 
Versailles,  in  a  statement  issued  on  May  3,  1919, 
asserted  that  "the  notes  of  1918  were  made  by  China 
as  a  price  for  Japan's  promise  to  withdraw  her 
troops  whose  presence  in  the  interior  of  Shantung 
as  well  as  the  establishment  of  Japanese  civil  admin- 
istration bureaus  therein  had  aroused  such  popular 
opposition  that  the  Chinese  Government  felt  con- 
strained to  make  the  arrangement. "  In  a  formal 
communication  to  the  President  of  the  Council  of 

*  Vide  Appendix  H. 


100  THE  SHANTUNG  QUESTION 

Three,  May  4,  1919,  the  Chinese  delegation  made 
almost  similar  assertion  when  it  said:  "The  Chinese 
Government  was  obliged  to  exchange  the  1918  notes 
because  the  continued  presence  of  the  Japanese 
troops  in  the  interior  of  Shantung  and  the  unauthor- 
ised establishment  of  Japanese  civil  administrative 
bureaus  which  attempted  to  govern  Shantung  as 
Japanese  territory,  aroused  such  popular  indignation 
and  opposition  that  no  other  course  seemed  open  to 
the  Chinese  Government  to  rid  the  Province  of  their 
presence." 

This  was  reason  enough  for  China  to  enter  into 
secret  agreements  with  Japan.  At  the  same  time,  it 
could  not  be  denied  that,  either  knowingly  or 
unknowingly,  China  walked  into  the  very  dangerous 
diplomatic  trap,  from  which  she  hardly  knew  how  to 
extricate  herself.  It  was  admitted  on  all  hands  that 
Japan  was  extremely  desirous  of  fortifying  her 
diplomatic  front  at  the  time,  so  that  she  could  face 
with  fortitude  and  courage  the  Shantung  question 
when  it  was  eventually  taken  up  for  settlement. 
Japan  had  keenly  felt  that  military  occupation  of  the 
territory  was  not  sufficient  ground  for  its  permanent 
possession.  By  means  of  the  Twenty-one  Demands, 
she  attempted,  therefore,  to  confirm  by  treaty  what 
she  had  acquired  by  force.  Japan  had  also  keenly 
realised  that  even  the  treaty  growing  out  of  the 
Twenty-one  Demands  was  not  a  valid  ground  for  her 
claim  to  the  possession  of  the  Shantung  peninsula, 
particularly  in  view  of  the  circumstances  under 
which  the  demands  had  been  forced  upon  China.* 

*  Cf.  author's  The  Twenty-one  Demands  and  The  China- Japanese  Trea- 
ties of  May  25, 1916. 


THE  SECRET  AGREEMENTS  OH  1918.;  ,.     Itfl 

So,  by  entering  into  secret  understandings  and  agree- 
ments with  Russia,  France,  Great  Britain  and  Italy, 
she  hoped  to  strengthen  her  claim  at  the  forthcoming 
peace  settlement.  With  China  participating  in  the 
war  and  in  view  of  the  certainty  of  her  having  a  seat 
at  the  peace  conference  where  she  could  plead  for  her 
own  case,  Japan  was  awakened  once  more  to  the  inse- 
curity of  her  diplomatic  position.  The  Allied  secret 
agreements  would  assure  her  the  support  of  the  four 
Powers,  but  they  were  entered  into  in  secret,  without 
the  knowledge  of  China,  the  United  States,  and  the 
other  Powers  who  would  participate  in  the  confer- 
ence. They  might  be  binding  upon  Great  Britain, 
Russia,  Prance  and  Italy ;  they  could  not  be  binding 
upon  China,  the  United  States,  and  other  belligerent 
Powers.  Japan's  certainty  of  winning  her  claim  on 
the  strength  of  these  secret  understandings  and 
agreements  was  again  in  doubt.  As  a  stroke  of 
diplomacy,  then,  nothing  could  be  devised,  more 
astute  and  more  assuring,  than  to  get  China  into  these 
secret  agreements  of  1918,  which  could  be  held  out  as 
the  evidence  and  proof  of  China's  willingness  to 
settle  the  Shantung  question  according  to  the  terms 
which  Japan  had  desired. 


THE  SHANTUNG  QUESTION  AT   THE  PEACE   CONFERENCE 
AT  VERSAILLES 

WITH    the    meeting    of    the    Allied    and 
Associated  Powers  at  Versailles  to  dictate 
terms  of  peace  to  Germany,  the  Shantung 
question  reached  an  acute  stage,  where  it  was  possible 
either  to  make  out  of  it  an  example  of  settlement 
based  upon  international  justice  and  morality,  or  to 
intensify  a  serious  international  grievance  and  make 
its  redress  more  remote  and  more  difficult. 

The  Peace  Conference  was  organised  in  Paris  on 
January  18,  1919.  The  first  Plenary  Session  of  the 
Conference  was  held  on  January  25.  With  the  elec- 
tion of  its  President,  with  the  appointment  of  numer- 
ous commissions  and  sub-commissions,  and  with  the 
creation  of  the  so-called  "Council  of  Ten"  composed 
of  two  representatives  from  each  of  the  five  "Prin- 
cipal Powers,"  the  machinery  of  the  Conference  to 
formulate  the  conditions  of  peace  to  end  the  Great 
War  was  set  in  full  swing.  It  should  be  noted  that  a 
line  was  clearly  drawn,  in  the  proceedings  of  the  Con- 
ference, between  the  great  and  minor  Powers.  The 
United  States  of  America,  the  British  Empire, 
Prance,  Italy  and  Japan  styled  themselves  as  "the 
Principal  Allied  and  Associated  Powers,"  and  the 
other  twelve  minor  nations  were  called  merely  "the 
Allied  and  Associated  Powers."  Inasmuch  as  the 

102 


AT  THE  VERSAILLES  PEACE  CONFERENCE     103 

Council  of  Ten  handled  practically,  at  the  early  stage 
of  the  Conference,  the  main  portion  of  its  business, 
and  inasmuch  as  the  small  Powers  had  no  representa- 
tion in  the  Council,  it  was  not  very  far  from  the  truth 
to  say  that,  in  the  organisation  and  the  proceedings 
of  the  Conference,  the  five  " Principal  Powers" 
enjoyed  the  position  similar  to  that  of  the  judges  of 
a  Supreme  Court,  to  which  the  minor  Powers  pre- 
sented their  cases  for  judgment.  It  is  important  to 
bear  this  point  in  mind,  for  the  different  position 
which  China  and  Japan  had  respectively  occupied 
had  a  great  deal  to  do  with  the  final  decision  arrived 
at  on  the  Shantung  question.  Japan  was  one  of  the 
Principal  Powers,  represented  on  the  Council  of  Ten, 
and  as  such  she  was,  in  the  Shantung  dispute,  a  con- 
testant and  a  judge  in  the  case  at  the  same  time.  On 
the  other  hand,  as  one  of  the  "  Allied  and  Associated 
Powers,"  China  hovered  around  the  outskirts  of  the 
Conference,  with  no  more  right  than  that  of  petition- 
ing to  have  her  views  heard. 

Two  days  after  the  first  Plenary  Session  of  the 
Conference,  January  27,  1919,  the  dispute  between 
China  and  Japan  over  the  disposition  of  German 
rights  and  concessions  in  Shantung  was  brought  to 
the  fore.  In  the  presence  of  the  Chinese  delegates, 
the  Japanese  argued  their  case  before  the  Council  of 
Ten.  It  was  at  this  meeting  that  the  secret  agree- 
ments between  Japan  on  the  one  side  and  the  four 
Entente  Powers  on  the  other  about  the  future  posses- 
sion of  Shantung  and  the  disposition  of  the  German 
interests  in  the  province  were  revealed.  The  Amer- 
ican delegates,  like  the  Chinese  delegates,  as  has  been 
pointed  out  in  a  previous  chapter,  went  to  the  Ver- 


104  THE  SHANTUNG  QUESTION 

sallies  Peace  Conference  in  absolute  ignorance  of 
these  secret  agreements,  and  they  were  completely 
taken  by  surprise  when  they  were  told,  in  reply  to  a 
suggestion  that  Shantung  should  be  given  back  to 
China,  that  a  different  arrangement  had  previously 
been  reached.  The  disclosure  was  made  on  January 
27,  but  the  fact  did  not  become  generally  known  until 
several  months  later.  The  following  is  taken  from 
a  special  despatch  by  Charles  A.  Selden  to  the  New 
York  Times  under  the  Paris  date  of  April  22,  1919, 
which  gave  a  vivid  (though  somewhat  different) 
account,  not  only  of  the  circumstances  under  which 
the  secret  agreements  were  revealed  to  the  Peace  Con- 
ference, but  also  of  the  reasons  for  which  they  had 
been  entered  into : 

41 

"  Neither  President  Wilson  nor  the  Chinese  delegates  knew 
of  the  existence  of  these  secret  agreements  when  they  came  to 
Paris.  The  disclosure  was  first  made  to  Mr.  Wilson  at  a  meeting 
of  the  Council  of  Ten,  when  the  question  of  the  mandatory 
system  as  suggested  by  the  American  President  was  first  under 
discussion.  It  was  then  proposed  that  the  German  islands  be 
disposed  of  by  placing  them  under  mandates. 

"It  was  an  awkward  moment.  Mr,  Lloyd  George  remarked 
that  an  arrangement  of  a  different  character  had  already  been 
reached  with  reference  to  the  islands.  Mr.  Wilson  asked  what 
it  was.  Mr.  Lloyd  George  turned  to  Baron  Makino  for  an 
explanation,  whereupon  Mr.  Wilson  was  informed  that  Japan 
had  received  the  promise  of  England,  France,  Italy,  and  Russia, 
two  years  before,  that  she  should  have  outright  all  the  German 
islands  north  of  the  equator,  and  that  she  had  agreed  that 
Australia  should  have  all  to  the  south.  It  was  common  knowl- 
edge that  such  a  distribution  had  been  long  contemplated,  but 
nobody  outside  the  Foreign  Offices  of  the  Governments  directly 
involved  knew  that  there  were  definite  signed  agreements  con- 
cerning the  deal. 

'"  After  learning  so  much  Mr.  Wilson  asked  if  there  were  any 
other  secret  agreements  which  had  not  been  produced  at  the 


AT  THE  VERSAILLES  PEACE  CONFERENCE     105 

conference.  It  was  then  admitted  that  the  agreement  with 
Japan  also  included  the  British,  French,  and  Italian  promises 
to  support  her  claims  to  the  Chinese  Province  of  Shantung  as 
the  price  Japan  demanded  for  allowing  China  to  enter  the  war, 
despite  the  fact  that  China  had  been  repeatedly  trying  to  get  into 
the  war  against  Germany  of  her  own  volition. 

"The  reasons  for  her  failure  to  become  a  participant  make 
an  interesting  phase  of  this  Asiatic  question.  She  was  barred 
out  in  the  early  stages  of  hostilities  because  Japan  had  no  desire 
to  let  China  participate  in  the  military  task  of  recovering  her 
own  territory  in  Shantung  Province  from  the  Germans  at  Kiao- 
chow.  Again,  in  November,  1915,  China  tried  to  enter  the  contest 
as  desired  by  the  European  powers.  On  that  occasion  Baron 
Ishii,  then  Japanese  Minister  of  Foreign  Affairs,  said  to  the 
European  Ambassadors  at  Tokio :  'Japan  could  not  view  without 
apprehension  the  moral  awakening  of  400,000,000  Chinese  which 
would  result  from  their  entering  the  war/ 

"China  did  not  dare  act  contrary  to  the  wishes  of  Japan, 
for  she  knew  Europe  could  not  help  her  in  case  of  need,  and  she 
feared  Japanese  aggression.  But  another  opportunity  came  to 
China  early  in  1917,  when  the  United  States  broke  diplomatic 
relations  with  Germany  and  invited  all  the  neutral  countries 
of  the  world  to  follow  her  example.  Then  Japan,  like  the  rest 
of  the  world,  realised  that  America  would  soon  become  an  active 
belligerent,  and  that  the  defeat  of  Germany  was  no  longer  a 
matter  of  doubt.  Japan  also  realised  then  that  she  could  no 
longer  keep  China  neutral.'* 

At  the  risk  of  repetition  and  as  a  digression,  it  may 
be  said  that,  from  the  foregoing  account,  the  world  at 
large  learned,  if  not  for  the  first  time,  the  fact  that 
Japan  had  on  different  occasions  prevented  China 
from  taking  part  in  the  European  war.  In  the  first 
place,  China  was  denied  participation  in  the  Tsingtao 
expedition  in  September,  1914.  When  China  at- 
tempted again  to  participate  in  the  European  conflict 
in  November,  1915,  at  the  urgent  request  of  the 
European  Powers,  particularly  Belgium  and  France, 
Japan,  through  Viscount  Ishii,  again  refused  to  give 


106  THE  SHANTUNG  QUESTION 

her  endorsement.  It  is  interesting  to  recall  what 
Viscount  Ishii  said  apropos  of  this  matter,  that  he 
was  afraid  of  the  moral  awakening  of  the  four  hun- 
dred millions  of  Chinese.  Another  opportunity 
came  to  China  early  in  1917  when  the  United  States 
broke  off  her  diplomatic  relations  with  Germany  and 
invited  all  the  neutral  countries  in  the  world  to  follow 
the  example.  Of  all  the  neutral  countries  so  invited, 
China  was  the  only  Power  who  had  responded  favour- 
ably by  breaking  off  diplomatic  relations  with  the 
German  Imperial  Government.  Realising  that 
China  could  no  longer  be  kept  neutral  during  the  war, 
Japan  at  once  set  to  work  to  insure,  first  her  claims 
in  regard  to  the  German  possessions  in  the  Pacific 
north  of  the  Equator,  and  secondly  her  claims  in 
regard  to  the  German  rights  and  interests  in  Shan- 
tung, in  anticipation  of  the  presence  of  China  at  the 
forthcoming  Peace  Conference  to  plead  her  own 
cause. 

In  the  meeting  of  the  Council  of  Ten,  January  27, 
a  formal  request  was  made  that  China's  claims  should 
also  be  heard.  The  request  was  complied  with,  and 
on  the  following  day,  January  28,  the  Chinese  dele- 
gates were  called  upon  on  two  hours'  notice  to 
present  China's  case.*  This  time  the  Japanese 
representatives  on  the  Council  listened  to  the  case 
in  which  they  were  themselves  greatly  inter- 
ested. Promising  that  China's  case  would  be  fully 
presented  in  documentary  form,  the  Chinese  dele- 
gates made  at  the  time  an  outline  of  their  arguments, 

*  The  Chinese  delegation  also  offered  to  make  public  the  Chino-Japanese 
secret  agreements  of  1918.  This  tentative  offer  caused  the  Japanese 
Minister  in  Peking  to  threaten  China  with  war,  which  was  given  in  extenso 
in  Note  II  appended  to  this  chapter. 


AT  THE  VERSAILLES  PEACE  CONFERENCE     107 

Which  were  conveyed,  however,  in  such  a  convincing 
manner  that  they  "  simply  overwhelmed  the  Japan- 
ese." Mr.  Eobert  Lansing,  a  member  of  the  Council, 
believed  that  the  Chinese  presentation  was  far 
superior  to  that  of  the  Japanese  the  day  before.  "I 
believe  that  that  opinion  was  common  to  all  those  who 
heard  the  two  presentations,"  he  wrote  in  The  Peace 
Negotiations.  "In  fact  it  made  such  an  impression 
on  the  Japanese  themselves,  that  one  of  the  delegates 
called  upon  me  the  following  day  and  attempted  to 
offset  the  effect  by  declaring  that  the  United  States, 
since  it  had  not  promised  to  support  Japan's  conten- 
tion, would  be  blamed  if  Kiaochow  was  returned 
directly  to  China.  He  added  that  there  was  intense 
feeling  in  Japan  in  regard  to  the  matter.  It  was  an 
indirect  threat  of  what  would  happen  to  the  friendly 
relations  between  the  two  countries  if  Japan's  claim 
was  denied." 

Thus,  at  the  very  beginning  of  the  Peace  Confer- 
ence, the  Chinese  and  Japanese  dispute  about  the 
disposition  of  the  German  rights  in  Shantung, 
threatened  to  be  a  serious  issue.  The  disclosure  of 
the  secret  understandings  about  Shantung  created  a 
situation,  whereby  China's  claim  was  to  be  decided 
by  five  "Principal  Powers,"  four  of  whom  had 
previously  agreed  to  decide  against  China.  In  spite 
of  this  obvious  disadvantage,  it  was  conceded  in  the 
early  days  of  the  Conference,  that  China's  just 
claims  would  be  supported.  "President  Wilson  and 
the  American  Commissioners,"  said  Mr.  Lansing, 
"unhampered  by  previous  commitments,  were 
strongly  opposed  to  acceding  to  the  demands  of  the 
Japanese  Government.  The  subject  had  been 


108  THE  SHANTUNG  QUESTION 

frequently  considered  during  the  early  days  of  the 
negotiations  and  there  seemed  to  be  no  divergence  of 
views  as  to  the  justice  of  the  Chinese  claim  of  right 
to  the  resumption  of  full  sovereignty  over  the  terri- 
tory affected  by  the  lease  and  the  concessions  to 
Germany."  But  the  return  of  President  Wilson  to 
the  United  States  on  February  14,  1919,  and  the 
numerous  meetings  of  the  Commission  on  the  League 
of  Nations  interrupted  further  consideration  of  the 
Shantung  question.  Nothing  could  suit  the  Japan- 
ese delegates  better  than  this  interruption,  for  they 
were  playing  a  waiting  game,  exerting  every 
influence  to  delay  a  settlement  of  the  question,  "  ap- 
parently in  the  hope  that  a  turn  of  events  would 
provide  a  favourable  opportunity  to  press  Japan's 
claims."  The  Chinese  delegates  were,  of  course, 
desirous  of  an  early  decision.  Several  times  they 
urged  that  the  question  should  be  given  prompt  con- 
sideration. But  the  absence  of  President  Wilson 
and  other  questions  at  the  Conference  pressing  for 
disposal  made  it  practically  impossible  to  give  proper 
attention  to  the  Shantung  dispute.  The  considera- 
tion of  the  matter  was  not  resumed  until  after 
President  Wilson's  return  to  Paris,  March  14.  A 
little  later,  the  " Council  of  Pour,"  composed  of  the 
heads  of  the  United  States,  Italy,  Prance  and  Great 
Britain,  superseded  the  " Council  of  Ten." 

In  the  period  that  intervened  between  the  dis- 
closure of  the  Allied  secret  agreements  and  the 
resumption  of  consideration  of  the  Shantung  ques- 
tion, the  Japanese  delegates  brought  forward  the 
issue  of  racial  equality  by  proposing  in  the  Commis- 
sion on  the  League  of  Nations  that  a  clause  to  that 


AT  THE  VERSAILLES  PEACE  CONFERENCE      109 

effect  should  be  inserted  in  the  Covenant  of  the 
League.  Different  views  were  held  about  the  issue. 
Some  considered  it  as  Japan's  diplomatic  smoke 
screen;  others  regarded  it  as  something  with  which 
Japan  could  strike  a  bargain.  At  any  rate,  the  ques- 
tion of  racial  equality,  when  raised  by  the  Japanese 
delegates,  met  with  vigorous  opposition  by  Australia, 
Canada,  and  the  United  States.  "As  far  as  I  could 
judge,  all  of  the  official  experts  on  the  Far  East 
attached  to  the  principal  governments  at  the  Con- 
ference regarded  Japan's  introduction  of  the  race 
equality  as  a  diplomatic  ' herring',''  said  Mr.  Thomas 
F.  Millard,  one  of  the  unofficial  experts  attached  to 
the  Chinese  delegation.  "None  of  the  American 
experts  felt  any  uneasiness  at  the  suggestion  that 
Japan  should  be  conciliated  by  inserting  some  gen- 
eralisation about  race  equality  into  the  preamble  of 
the  League  Covenant.  On  the  contrary,  it  was  felt 
that  by  doing  that  Japan  would  be  deftly  deprived  of 
an  alleged  ' grievance'.  A  proposal  that  the  League 
Covenant  would  recognise  race  equality  of  course 
could  not  be  opposed  by  the  other  Oriental  nations 
represented  at  the  Conference.  The  Chinese  delega- 
tion was  fully  aware  of  the  true  character  of  this  move 
of  Japan,  but  when  the  question  came  up  before  the 
Council  of  Ten  (sic)  the  Chinese  representative  voted 
for  it.  It  was  well  understood  that  the  real  objectors 
to  a  recognition  of  race  equality  by  the  Covenant 
were  the  Australasians ;  yet  when  the  question  came 
up  at  a  plenary  session  (April  28?)  of  the  Con- 
ference, President  Wilson  somehow  was  induced  to 
be  the  spokesman  of  the  explanation  for  rejecting 
Japan's  proposal." 


110  THE  SHANTUNG  QUESTION 

Early  in  April  the  Shantung  question  was  again 
seriously  discussed.  Professor  E.  T.  Williams,  chief 
expert  on  the  Far  Eastern  affairs  attached  to  the 
American  Commission,  was  repeatedly  called  in  for 
consultation.  On  April  9,  he  sent  a  memorandum  to 
the  American  Commission,  in  which  he  suggested  to 
draw  a  clause  for  the  treaty  of  peace,  which  would 
provide  for  the  transfer  of  the  German  rights  in 
Shantung  directly  to  China.  On  the  following  day, 
April  10,  he  was  instructed  to  draft  such  a  clause. 
In  consultation  with  Dr.  James  Brown  Scott,  chief 
expert  on  International  Law,  a  compromise  clause 
was  agreed  upon,  transferring  the  German  rights, 
instead  of  to  China  directly,  but  to  the  five  Principal 
Allied  and  Associated  Powers  uin  trust." 

On  April  11,  in  the  meeting  of  the  Commission  of 
the  League  of  Nations,  Japan  lost  her  fight  for  insert- 
ing in  the  covenant,  or  in  its  preamble,  a  clause 
recognising  racial  and  national  equality.  The  Jap- 
anese delegates  knew  full  well  that  the  more  vigor- 
ously their  Allied  colleagues  opposed  the  racial 
equality  issue  in  the  Commission  of  the  League  of 
Nations,  the  more  it  would  be  incumbent  upon  them 
to  support  Japan's  claim  in  Shantung  and  the  more 
easily  she  would  obtain  satisfaction  in  the  real  impor- 
tant issue  in  which  she  was  interested.  The  losing 
out  on  her  proposal  for  racial  equality,  which  was, 
by  the  way,  cordially  supported  by  the  Chinese  dele- 
gates "in  principle,"  was,  as  far  as  Japan's  real 
interest  at  the  Peace  Conference  was  concerned,  a 
blessing  in  disguise. 

In  the  meantime,  it  should  be  remembered,  the 
Council  of  Pour  had  taken  the  place  of  the  Council 


AT  THE  VERSAILLES  PEACE  CONFERENCE     111 

of  Ten.  Japan  was  not  represented  on  the  Council 
of  Four,  which  included  only  the  heads  of  the  United 
States,  the  British  Empire,  Italy  and  France.  When 
the  Shantung  question  was  taken  up  by  the  new 
machinery  of  the  Conference,  it  had  but  to  reach  a 
decision  or  to  offer  a  formula  for  settlement.  It  was 
known  that  President  Wilson  stood  firmly  for 
Chinese  rights.  Acting  upon  the  suggestion  from 
Professor  Williams  and  Dr.  Scott,  President  Wilson 
proposed,  as  a  compromise,  that  the  five  Principal 
Powers,  Japan  included,  should  act  as  joint  trustees 
of  the  former  German  rights  in  Shantung.  The 
Japanese  delegates  refused,  however,  to  consent  to 
the  proposal. 

An  April  21,  apparently  influenced  by  the  unfa- 
vourable situation  apropos  of  the  Shantung  question, 
Baron  Makino  and  Viscount  Chinda  called  upon 
Secretary  Lansing  to  "talk  the  matter  over."  Mr. 
Lansing  was  frank  enough  to  tell  them  that  "they 
ought  to  prove  the  justice  of  the  Japanese  claim,  that 
they  had  not  done  it"  and  that  he  doubted  their  abil- 
ity to  do  so. 

There  could  be  no  denying  that,  pressed  for  the 
completion  of  the  Treaty  of  Peace  with  Germany, 
which  was  to  embody  the  Shantung  settlement,  the 
situation  was  becoming  more  and  more  acute.  On 
April  22,  President  Wilson  consulted  Professor 
Williams  again.  In  the  testimony  given  before  the 
Senate  Committee  on  Foreign  Relations,  August  22, 
1919,  Professor  Williams  said  that  after  receiving  a 
telephone  message,  he  went  to  see  the  President. 
"The  President  said  he  wanted  me  to  consult  with 
Far  Eastern  experts  of  the  British  and  French  dele- 


112  THE  SHANTUNG  QUESTION 

gations  as  to  which  of  two  alternatives  would  be  less 
injurious  to  China,  to  transfer  to  Japan  all  the  rights 
and  privileges  formerly  enjoyed  by  Germany  in  the 
province  of  Shantung,  or  to  insist  upon  the  execution 
of  the  convention  of  May  25,  1915,  between  China 
and  Japan/'  Professor  Williams  offered  another 
alternative  solution:  "We  might  put^a  blanket 
article  in  the  treaty  covering  all  German  properties 
in  China,  saying  that  Germany  renounced  all  rights 
and  titles  to  those  government  properties  in  China 
and  that  they  reverted  automatically  to  China. ' '  But 
since  the  port  of  Tsingtao  and  the  railways  and  mines 
in  the  province  had  been  taken  from  Germany  by 
Japan,  with  the  aid  of  Great  Britain,  and  since  they 
were  now  in  the  possession  of  Japan,  they  would  be 
transferred  to  China  by  Japan  within  one  year  after 
the  signing  of  the  peace  treaty.  President  Wilson 
did  not  accept  this  alternative,  but  told  Professor 
Williams  to  consult  the  British  and  French  Par  East- 
ern experts  about  the  two  alternatives  he  himself 
had  raised. 

At  the  meeting  of  the  Council  of  Pour,  which  took 
place  at  President  Wilson's  house,  Place  des  Etats- 
Unis,  at  4:30  p.  m.,  Tuesday,  April  22,  the  Allied 
secret  agreements  on  the  disposition  of  the  German 
rights  in  Shantung  were  discussed.  The  Chinese 
delegates,  who  were  present  at  the  meeting,  asked  for 
a  settlement  of  the  Shantung  question  in  terms  of 
International  Law  and  justice,  and  pleaded  that 
China's  participation  in  the  war  and  the  abrogation 
of  the  German  rights  in  Shantung  had  brought  about 
$o  radical  a  change  of  the  general  political  and  diplo- 
matic situation  as  to  render  almost  unenf  orcible  these 


AT  THE  VERSAILLES  PEACE  CONFERENCE     113 

Allied  secret  agreements.  Lloyd  George  defended 
the  secret  agreements,  and  justified  them  on  the 
ground  of  military  necessity.  His  defence  was 
recorded  in  the  minutes  of  the  meeting,  taken  by  Sir 
Maurice  A.  P.  Hankey,  Secretary  to  the  Council. 
These  minutes  are  now  still  among  the  secret  and 
confidential  papers  of  the  Versailles  Peace  Con- 
ference. While  it  is  not  necessary  to  show  the  source 
of  our  information,  we  may  state  that  the  following 
is  an  extract  taken  textually  from  the  minutes  of  the 
meeting  of  the  Council  of  Four : 

"Mr.  Lloyd  George  said:  'The  engagement  that  had  been 
entered  into  with  Japan  had  been  contracted  at  a  time  when  the 
support  of  that  country  was  urgently  needed!*  He  would  not 
say  that  the  war  could  not  have  been  won  without  that  support. 
But  he  could  say  that  Kiaochow  could  not  have  been  captured 
without  Japanese  support.  It  was  a  solemn  treaty  and  Great 
Britain  could  not  turn  around  to  Japan  now  and  say,  '  All  right, 
thank  you,  thank  you  very  much.  When  we  wanted  your  help, 
you  gave  it,  but  now  we  think  that  the  treaty  was  a  bad  one 
and  should  not  be  carried  out.'  ! 

This  was  the  argument  of  the  British  statesman. 
As  to  its  plausibility,  it  is  unnecessary  to  say.  It 
seemed,  however,  that  with  the  British  statesmen, 
the  sense  of  honour  and  obligation  was  fostered  at  the 
sacrifice  of  international  justice  and  morality. 

While  the  Shantung  dispute  was  pressing  for  a 
final  decision,  the  Adriatic  question  took  an  unex- 
pected turn,  which  seemed  to  augur  well  for  China. 
On  April  23,  the  Council  of  Four  was  hopelessly 
deadlocked  on  the  Italian  question.  Going  over  the 
heads  of  the  Italian  delegation  and  the  Italian  Gov- 
ernment, President  Wilson  issued  his  courageous 
message  to  the  world  regarding  the  disposition  of 


114  THE  SHANTUNG  QUESTION 

Piume,  refusing  to  recognise  the  allied  secret  under- 
standing, but  upholding  the  rights  of  the  Jugoslavs. 
Mr.  Charles  A.  Selden,  Special  Correspondent  of  The 
New  York  Times,  in  a  despatch  to  that  paper  under 
the  Paris  date  of  April  24,  said :  "Next  to  the  Jugo- 
slavs, the  people  in  Paris  who  are  happiest  to-day 
because  of  President  Wilson's  Italian  decision  are 
the  Chinese.  Rightly  or  wrongly,  they  feel  they  have 
in  the  American  President's  Adriatic  ruling  a  fore- 
runner of  what  they  may  hope  for  with  reference  to 
the  settlement  of  their  controversy  with  Japan  con- 
cerning Shantung.  Not  only  are  the  Chinese  confi- 
dent, but  everybody  about  the  Conference  to-day 
seems  to  take  it  for  granted  that  a  similar  outcome 
may  be  looked  for  in  the  Asiatic  dispute."  Indeed, 
it  may  be  said  with  truth  that  the  dispute  between 
China  and  Japan  over  the  possession  of  the  Shantung 
province  and  the  German  interests  therein  was 
closely  paralleled  by  the  dispute  between  Italy  and 
Jugoslavia  over  Piume  and  Dalmatia  at  the  Ver- 
sailles Peace  Conference.  Just  as  Italy  had  based 
her  claims  in  the  Adriatic  primarily  upon  the  Treaty 
of  London  of  1915,  so  Japan  had  rested  her  claims 
upon  a  similar  arrangement  which  was  entered  into 
between  Japan  on  the  one  side,  and  Russia,  Italy, 
Prance,  and  Great  Britain  on  the  other.  There  was, 
indeed,  a  point  of  curious  similarity  between  the 
quarrel  of  Italy  and  Jugoslavia  and  that  of  China 
and  Japan.  But  the  same  well-known  correspon- 
dent, whom  we  have  quoted  before,  observed  that 
there  was,  at  least,  this  much  difference:  "Italy  is 
struggling  to  get  the  debatable  territory  promised 
her  by  England  and  Prance  as  an  inducement  to 


AT  THE  VERSAILLES  PEACE  CONFERENCE     115 

enter  the  war.  Japan  is  fighting  to  get  admittedly 
Chinese  territory  as  a  reward  for  letting  China  enter 
the  war." 

On  the  same  day,  April  23,  it  should  be  recalled  that 
the  Chinese  delegates  proposed  in  writing  to  the 
Council  of  Four  a  " compromise  settlement,"  similar 
to  the  Williams-Scott  suggestion.  China  offered  to 
reimburse  Japan  her  military  and  naval  expenses 
involved  in  the  taking  of  Kiaochow  and  to  create  at 
Tsingtao  an  international  settlement.  She  sug- 
gested, at  the  same  time,  that  the  German  rights  in 
Shantung  should  be  ceded  by  Germany  to  the  five 
Principal  Powers  to  be  eventually  returned  to  China, 
and  that  Japan  should  engage  to  evacuate  Shantung 
entirely  within  one  year  after  the  signing  of  the 
Peace  Treaty.  Among  the  intimate  circles  of  the 
Chinese  delegation  at  Paris,  it  was  also  known  that 
some  of  the  Chinese  delegates,  in  a  spirit  of  compro- 
mise and  anxious  for  an  early  settlement,  went  so  far 
as  to  intimate  to  the  Council  of  Four  that  they  would 
perhaps  consent  to  a  direct  cession  to  Japan  of  the 
German  rights  in  Shantung,  to  be  eventually  returned 
to  China,  if  the  United  States,  Italy,  France,  and 
Great  Britain  would  act  as  joint  trustees,  as  sug- 
gested by  President  Wilson. 

On  April  24,  the  Far  Eastern  experts  of  the  Amer- 
ican, British  and  French  delegations  met  to  consider 
President  Wilson's  two  alternatives.  It  was  agreed 
that  "it  would  be  less  injurious  to  China  to  transfer 
all  the  rights  formerly  enjoyed  by  Germany  in  the 
province  of  Shantung  to  Japan  than  it  would  be  to 
insist  upon  the  observance  of  the  China- Japan  con- 
vention of  1915."  It  was  the  opinion  of  Professor 


116  THE  SHANTUNG  QUESTION 

Williams  that  neither  alternative  should  be  adopted. 
Neither  the  enforcement  of  the  1915  treaty  should  be 
insisted  upon,  nor  the  German  rights  should  be  trans- 
ferred to  Japan.  This  opinion  was  concurred  in  by 
the  British  expert.  It  should  also  be  noted  that  on 
the  same  day  the  Council  of  Pour  became,  with  the 
withdrawal  of  the  Italian  delegation,  the  Council  of 
Three,  composed  of  President  Wilson,  Lloyd  George, 
and  Clemenceau. 

On  April  26,  President  Wilson,  deeply  concerned 
with  the  existing  state  of  the  controversy,  asked  Sec- 
retary Lansing  to  see  the  Japanese  delegates  and  "to 
dissuade  them  from  insisting  on  their  demands  and 
to  induce  them  to  consider  the  international  trustee- 
ship proposed."  Mr.  Lansing  thus  recorded  in  his 
book :  "The  evening  of  the  same  day  the  two  Japan- 
ese came  by  request  to  my  office  and  conferred  with 
Professor  E.  T.  Williams,  the  Commission's  prin- 
cipal adviser  on  Far  Eastern  affairs,  and  with  me. 
After  an  hour's  conversation  -Viscount  Chinda  made 
it  very  clear  that  Japan  intended  to  insist  on  her 
' pound  of  flesh'.  It  was  apparent  both  to  Mr. 
Williams  and  to  me  that  nothing  could  be  done  to 
obtain  even  a  compromise,  though  it  was  on  the  face 
favourable  to  Japan,  since  it  recognised  the  existence 
of  German  rights,  which  China  claimed  were  an- 
nulled." The  insistence  by  the  Japanese  upon  their 
claims  was  fully  reported  to  President  and  his 
fellow  Commissioners. 

In  the  afternoon  of  April  28,  a  Plenary  Session  of 
the  Conference  was  held,  in  which  the  Covenant  of 
the  League  of  Nations  was  adopted.  Baron  Makino, 
the  Japanese  delegate  who  led  the  fight  for  racial  and 


AT  THE  VERSAILLES  PEACE  CONFERENCE     117 

national  equality,  announced  in  the  session  that  he 
would  not  insist  upon  an  amendment  to  the  Covenant 
providing  for  the  said  equality.  The  surrender  by 
the  Japanese  was  at  once  sensed  as  an  iniquitous  bar- 
gain being  struck,  whereby  they  agreed  to  waive  their 
claim  to  race  equality  and  to  accept  the  Covenant  for 
presumably  a  satisfactory  settlement  in  regard  to 
Shantung.  General  Bliss,  Mr.  White  and  Secretary 
Lansing,  American  Commissioners,  were  unanimous 
in  their  opinion  that  China's  rights  should  be  sus- 
tained even  if  Japan  should  withdraw  from  the  Peace 
Conference.  They  were  all  indignant  at  the  idea  of 
submitting  to  the  Japanese  claims  and  decided  that 
President  Wilson  should  be  informed  of  their  atti- 
tude. Thus,  on  April  29 — the  same  day  the  German 
delegates  arrived  in  Paris  to  receive  "the  conditions 
of  peace,"  General  Bliss,  with  the  concurrence  of 
Mr.  White  and  Mr.  Lansing,  sent  to  President 
Wilson  a  strong  letter,  nothing  short  of  a  protest,  in 
which  it  was  pointed  out  that  to  give  Shantung  to 
Japan,  instead  of  China,  would  be  a  great  moral 
wrong,  and  that  it  could  not  be  right  to  do  wrong 
even  to  make  peace.* 

When  this  protest  was  written  and  delivered,  the 
final  decision  about  the  Shantung  question  had  not 
yet  been  reached.  It  was  not  until  April  30,  the  day 
following  the  delivery  of  this  protest,  that  the  Coun- 
cil of  Three  decided  irrevocably  to  give  Shantung 
to  Japan.  In  the  evening  of  the  same  day,  Mr.  Ray 
Stannard  Baker,  under  the  President's  direction, 
brought  a  memorandum  to  the  Chinese  delegation, 
informing  it  in  substance  of  the  decision  already 

*  Vide  Appendix  K. 


118  THE  SHANTUNG  QUESTION 

reached  on  the  Shantung  question  and  explaining  the 
reasons  why  President  Wilson  had  agreed  to  the 
award.*  The  explanation  given  was,  briefly,  to  this 
effect:  "The  President  was  fearful  of  a  disruption 
of  the  Conference  (presumably  by  Japan's  threat  to 
withdraw  and  also  because  of  intimations  that,  in 
case  Japan  withdrew,  Great  Britain  might  not  be 
able  to  sign  the  treaty),  and  that  in  order  to  secure 
Japan's  adherence  to  a  League  of  Nations  he  had 
thought  it  necessary  to  accept  a  solution  that  was 
insisted  on  by  Japan.  It  was  the  President's  view, 
so  the  Chinese  delegation  was  told,  that  China  would 
eventually  secure  justice  from  the  League  of 
Nations." 

On  this  explanation,  one  of  the  Chinese  delegates 
was  reported  to  have  commented : 

"  First,  the  League  of  Nations  has  not  existed  yet. 

"Secondly,  if  a  League  of  Nations  should  be  organised,  its 
power  and  authority  would  be  problematical. 

"Thirdly,  the  real  ruling  force  in  any  league  constituted  at 
this. time  would  be  the  same  major  Powers  that  composed  the 
Council  of  Four  (or  Three)  at  Paris  and  made  the  decision 
on  the  Shantung  question. 

"Fourthly,  it  is  not  logical  to  assume  that  a  League  of 
Nations  created  by  the  same  body  as  the  Treaty  and  in  conjunc- 
tion with  the  Treaty  can  be  expected  to  reverse  the  terms  of 
the  Treaty. 

"Fifthly,  it  is  only  the  so-called  weak  nations  that  are  asked 
to  depend  for  justice  and  security  upon  the  League  of  Nations, 
while  the  so-called  great  Powers  openly  decline  to  rest  their 
own  positions  and  security  on  the  League  alone  and  plainly 
regard  its  assurance  to  be  insufficient. " 


*The  fact  should  be  duly  noted  that  the  explanations  given  by  the 
British  and  French  were  conveyed  to  the  Chinese  delegation  by  M.  Pichon 
and  Mr.  Balfour,  both  being  Ministers  of  Foreign  Affairs  and  plenipoten- 
tiary delegates. 


AT  THE  VERSAILLES  PEACE  CONFERENCE     119 

It  cannot  be  denied  that  the  assurance  as  to  what 
the  League  of  Nations  could  do  to  rectify  any  injus- 
tice done  to  China  by  the  Shantung  award  was  vague 
and  inadequate. 

Immediately  after  the  substance  of  the  Shantung 
settlement  became  known,  the  Chinese  delegation 
formally  requested  a  copy  of  the  minutes  of  the 
meeting  of  the  Council  of  Three  in  which  the  Shan- 
tung decision  was  finally  reached.  To  this  request 
no  reply  at  all  was  received  by  the  Chinese  delega- 
tion. On  May  1,  Mr.  Arthur  J.  Balfour,  on  behalf 
of  the  Council  of  Three,  verbally  informed  the 
Chinese  delegation  of  the  settlement.  The  Chinese 
delegates  renewed  their  request  and  asked  for  a  copy 
of  the  draft  clause  to  be  inserted  in  the  Peace  Treaty 
and  of  the  records  of  the  proceedings  of  the  Council 
bearing  on  the  Kiaochow- Shantung  question.  Mr, 
Balfour  did  not  reply  until  after  the  terms  were 
handed  to  the  Germans.  On  May  9,  he  sent  to  the 
Chinese  delegation  a  draft  of  the  Shantung  pro- 
visions in  the  Treaty  (which  had  already  been  made 
public  at  the  Plenary  Session  of  May  6  and  given  to 
the  Germans  the  following  day) ,  together  with  a  copy 
of  the  statement  given  out,  May  5,  by  Baron  Makino, 
senior  member  of  the  Japanese  delegation.  Pressed 
further  for  a  copy  of  the  minutes  of  the  Council  of 
Three,  Mr.  Balfour  answered  to  the  effect  that  the 
previous  statements,  written  or  verbal,  and  the  press 
statement  by  Baron  Makino,  contained  all  that  the 
Council  thought  it  necessary  to  say  then.  The 
Chinese  delegation  made,  then,  several  appeals  to 
President  Wilson  for  the  uecords,  but  without  avail. 
It  was  thus  seen  that  the  Chinese  delegates  were 


120  THE  SHANTUNG  QUESTION 

denied  complete  information  on  the  settlement  which 
they  were  expected  to  accept  without  reservation. 

On  May  3,  1919,  the  Chinese  delegation  issued  the 
following  statement : 

The  Chinese  delegation  views  with  astonishment  the  settle- 
ment proposed  by  the  Council  of  Three  in  regard  to  the  Shantung 
question.  China  came  to  the  Conference  with  confidence  in  the 
strong  and  lofty  principles  adopted  by  the  Allied  and  Associated 
Powers  as  the  basis  of  a  just  and  permanent  world  peace. 
Great,  therefore,  will  be  the  disappointment  and  disillusionment 
of  the  Chinese  people  over  the  proposed  settlement.  If  there  was 
reason  for  the  Council  to  stand  firm  on  the  question  of  Fiume, 
there  would  seem  all  the  more  reason  to  uphold  China's  claim 
relating  to  "Shantung,  which  involves  the  future  welfare  of 
36,000,000  souls  and  the  highest  interests  of  peace  in  the  Far 
East. 

On  the  afternoon  of  May  1st,  the  Chinese  Delegation  was 
verbally  informed  by  the  Council  of  Three  of  an  outline  of  the 
settlement.  Under  this  settlement  all  rights  in  Kiaochow-Shan- 
tung  formerly  belonging  to  Germany  are  to  be  transferred  with- 
out reservation  to  Japan.  While  Japan  voluntarily  engages  to 
hand  back  the  Shantung  peninsula  in  full  sovereignty  to  China, 
she  is  allowed  to  retain  the  economic  privileges  formerly  enjoyed 
by  Germany,  which,  the  Delegation  is  informed,  refer  to  the 
Tsingtao-Tsinan  railway,  280  miles  in  length,  the  mines  con- 
nected therewith,  and  two  railways  to  be  built  connecting 
Shantung  with  the  trunk  lines  running  from  Peking  to  the 
Yangtze  Valley.  In  addition,  she  obtains  the  right  to  establish 
a  settlement  at  Tsingtao.  Though  the  Japanese  military  forces 
are,  it  is  understood,  to  be  withdrawn  from  Shantung  at  the 
earliest  possible  moment,  the  employment  of  special  railway 
police  is  permitted. 

The  German  rights  in  Shantung,  it  will  be  recalled,  originated 
in  an  act  of  wanton  aggression  in  1897,  characteristic  of  Prus- 
sian militarism.  To  transfer  these  rights  to  Japan,  as  the 
Council  of  Three  has  proposed  to  do,  is  therefore  to  perpetuate 
an  act  of  aggression  which  has  been  resented  by  the  Chinese 
people  ever  since  its  perpetration. 

Moreover,  owing  to  China's  declaration  of  war  against  the 
Teutonic  Powers  on  August  l<i,  1917,  and  the  abrogation  of 


AT  THE  VERSAILLES  PEACE  CONFERENCE     121 

all  treaties  and  agreements  between  China  and  these  powers, 
the  German  rights  automatically  reverted  to  China.  This 
declaration  was  officially  notified  to,  and  taken  cognisance  of,  by 
the  Allied  and  Associated  Governments.  It  is  therefore  signifi- 
cant that  the  Council,  in  announcing  the  settlement  of  the 
Kiaochow-Shantung  question,  referred  to  the  rights  to  be  trans- 
ferred to  Japan  as  " rights  formerly  belonging  to  Germany."  It 
appears  clear  that  the  Council  has  been  bestowing  to  Japan 
rights,  not  of  Germany  but  of  China,  not  of  the  enemy  but  of  an 
Ally.  A  more  powerful  Ally  has  reaped  benefits  at  the  expense, 
not  of  the  common  enemy,  but  of  a  weaker  Ally. 

Such  virtual  substitution  of  Japan  for  Germany  in  Shantung, 
serious  enough  in  itself,  becomes  grave  when  the  position  of 
Japan  in  South  Manchuria  and  Eastern  Inner  Mongolia  is  read 
in  connection  with  it.  Firmly  entrenched  on  both  sides  of  the 
Gulf  of  Peichili — the  water  outlet  of  Peking — with  a  hold  on 
three  trunk  lines  issuing  from  Peking  and  connecting  it  with  the 
rest  of  China,  the  capital  becomes  but  an  enclave  in  the  midst 
of  Japanese  influence. 

Besides,  Shantung  is  China 's  holy  land,  packed  with  memories 
of  Confucius  and  hallowed  as  the  cradle  of  Chinese  civilisation. 
If  it  is  the  intention  of  the  Council  to  restore  it  to  China,  it  is 
difficult  to  see  on  what  consideration  of  principle  or  expediency 
can  be  justified  the  transfer  in  the  first  instance  to  an  alien  power 
who  then  "voluntarily  engages"  to  hand  it  back  to  its  rightful 
owner. 

Japan  has  based  her  claim  for  the  German  rights  in  Shantung 
also  on  the  treaty  notes  of  1915  and  on  the  notes  of  1918  with 
China.  It  is  to  be  noted,  however,  that  the  documents  of  1915 
were  agreed  to  by  China  under  the  coercion  of  an  ultimatum 
from  Japan  threatening  war  in  case  of  non-compliance  with  the 
Twenty-one  Demands.  The  notes  of  1918  were  made  by  China 
as  a  price  for  Japan's  promise  to  withdraw  her  troops  whose 
presence  in  the  interior  of  Shantung  as  well  as  the  establishment 
of  Japanese  civil  administration  bureaus  therein  had  aroused 
such  popular  opposition  that  the  Chinese  Government  felt  con- 
strained to  make  the  arrangement. 

The  Chinese  Delegation  understands  that  the  decision  of  the 
Council  has  been  prompted  by  the  fact  that  Great  Britain  and 
France  had  undertaken  in  February  and  March,  1917,  to  support 
at  the  Peace  Conference  the  claim  of  Japan  to  German  rights 
in  Shantung.  To  none  of  these  secret  agreements,  however,  was 


122  THE  SHANTUNG  QUESTION 

China  a  party,  nor  was  she  informed  of  their  contents  when 
she  was  invited  to  join  the  war  against  the  Central  Powers. 
The  fortunes  of  China  appear  thus  to  have  been  an  object  of 
negotiation  and  compensation  after  she  had  already  aligned  her- 
self with  the  Allied  cause.  Apart  from  this,  it  is  at  least  open 
to  question  how  far  these  agreements  are  still  applicable,  inas- 
much as  China  has  since  become  a  co-belligerent.  The  claims  of 
Japan  referred  to  in  these  agreements  appear,  moreover,  scarcely 
compatible  with  the  Fourteen  Points  formally  adopted  by  the 
Powers  associated  against  Germany. 

If  the  Council  has  granted  the  claims  of  Japan  in  full  for 
the  purpose  of  saving  the  League  of  Nations,  as  has  been 
intimated  to  be  the  case,  China  of  course  would  have  less  reason 
to  complain,  believing  as  she  does  that  it  is  a  duty  to  make 
sacrifices  for  such  a  noble  cause  as  the  establishment  of  a 
League  of  Nations.  The  Chinese  delegation  cannot,  however, 
refrain  from  wishing  that  the  Council  had  seen  fit,  as  it  would 
be  far  more  consonant  with  the  spirit  of  the  League  now  on 
the  eve  of  formation,  to  call  upon  strong  Japan  to  forego  her 
claims  animated  only  by  a  desire  for  aggrandizement,  instead 
of  upon  weak  China  to  surrender  what  was  hers  by  right. 

On  May  4,  the  Chinese  delegation  issued  another 
statement  to  the  press,  which  reads  as  follows : 

New  light  on  the  settlement  of  the  Kiaochow-Shantung  ques- 
tion has  made  the  Chinese  Delegation  indignant.  Though  three 
days  have  elapsed  since  settlement  by  the  Council  of  Three  was 
announced,  no  official  written  communication  on  the  details  of 
the  settlement  has  yet  reached  the  Delegation.  While  still 
waiting  in  suspense,  the  Delegation  has  learned  with  surprise 
that  the  clauses  to  be  inserted  in  the  Peace  Treaty  relating  to 
the  Shantung  question  are  worded  in  the  sweeping  language  of 
conquest.  These  clauses  go  further  than  what  was  even  sus- 
pected. Japan  is  given  everything  which  Germany  obtained 
from  China  by  aggression,  and  more. 

Japan  is  given  all  her  rights,  titles  or  privileges — concerning 
especially  the  territory  of  Kiaochow,  the  railways,  the  mines  and 
the  submarine  cables — which  Germany  acquired  by  virtue  of 
treaty  concluded  by  her  with  China,  March  6,  1898,  and  of  all 
other  acts  concerning  the  Province  of  Shantung. 

Japan  is  given  all  German  rights  in  the  Tsingtao-Tsinan 
Railway,  including  its  branches  and  the  mines  thereto  attached. 


AT  THE  VERSAILLES  PEACE  CONFERENCE     123 

Japan  is  given  all  the  German  submarine  cables  from  Tsingtao 
to  Shanghai  and  from  Tsingtao  to  Chefoo. 

Japan  is  given  all  the  German  public  property  rights  movable 
and  immovable  in  the  territory  of  Kiaochow. 

Although  China  has  the  best  title  to  these  rights,  which  are 
all  in  Chinese  territory,  not  a  word  is  said  in  the  draft  clauses  as 
to  what  rights  China  may  expect  to  recover  for  herself.  It  is 
left  entirely  to  Japan  to  say  what  she  will  be  pleased  to  return 
to  China  and  what  to  retain  for  her  own  enjoyment.  The  impor- 
tant facts  seems  to  be  altogether  ignored  that  Shantung  is 
a  Chinese  Province. 

The  Tsingtao-Tsinan  railway  was  built  with  Chinese  and 
German  private  capital.  The  whole  line  of  280  miles  lies 
entirely  in  Chinese  territory.  To  substitute  Japan  for  Germany 
in  the  rights  of  the  railway  is  to  greatly  endanger  the  welfare 
and  security  of  the  Chinese  Republic,  because  Japan  is  much 
nearer  to  China  than  Germany,  and  because  she  already  claims 
a  sphere  of  influence  in  Manchuria  closely  to  the  north  of 
Shantung. 

Reading  the  draft  clauses  together  with  the  outline  of  the 
Council's  proposed  settlement,  it  is  clear  that  the  Council 
makes  China  lose  both  ways :  it  has  given  Japan  not  only  more 
than  Germany  had  in  Shantung,  but  also  more  than  Japan 
claimed  from  China  in  the  treaty  of  1915  and  the  notes  of  1918. 
The  Council's  proposed  settlement  seems  to  sanction,  for 
example,  the  policing  of  the  Shantung  railway — a  privilege 
which  Germany  did  not  exercise  or  claim,  and,  it  is  apprehended, 
substitutes  a  permanent  Japanese  settlement  under  Japanese 
control  and  administration  for  a  German  leasehold  limited  to  a 
fixed  period  of  years.  By  transferring  to  Japan  all  German 
rights  in  Shantung,  as  stated  in  the  draft  clauses,  it  also  appears 
to  give  Japan  preferential  rights  which  she  did  not  claim  from 
China,  such  as  in  the  supply  of  capital,  materials  or  technical 
experts  in  Shantung  Province. 

The  more  the  Chinese  Delegation  studies  the  proposed  settle- 
ment the  less  it  understands  its  meaning  and  purpose  and  the 
more  it  feels  aggrieved.  It  will  be  difficult  to  explain  to  the 
Chinese  people  what  the  Peace  Conference  really  means  by 
justice. 

In  a  letter,  bearing  the  same  date,  to  the  President 
of  the  Council  of  Three,  the  Chinese  delegation 


124  THE  SHANTUNG  QUESTION 

expressed  its  "keen  disappointment"  and  registered 
its  formal  protest  against  the  settlement.  The  letter 
reads : 

DELEGATION  CHINOISE  AU  CONGRESS  DE  LA  PAIX 

Paris,  May  4,  1919. 
Sir: 

The  Rt.  Hon.  Arthur  J.  Balfour,  on  behalf  of  the  Council  of 
Three,  verbally  informed  the  Chinese  Delegates  on  May  1,  1919, 
of  the  settlement  arrived  at  by  the  Council  in  regard  to  the 
Kiaochow-Shantung  question.  They  were  given  to  understand 
that  the  clause  to  be  inserted  in  the  Peace  Treaty  would  be  very 
general,  to  the  effect  that  Germany  should  renounce  all  her  rights 
in  Kiaochow-Shantung  to  Japan ;  that  the  conclusion  reached  by 
the  Council  of  Three  regarding  Kiaochow-Shantung  was  that  all 
political  rights  formerly  enjoyed  by  Germany  were  to  be  restored 
to  China ;  and  to  Japan  were  to  be  given  only  the  economic  rights 
such  as  a  settlement  at  Tsingtao,  the  railway  already  built 
(Tsingtao-Tsinan  railway),  the  mines  connected  therewith,  and 
two  other  railways  to  be  built. 

They  were  given  to  understand  further  that  Japan  had  given 
explicit  assurances  to  the  Council  that  in  exercising  the  rights 
thus  given  her,  she  will  strictly  observe  the  principle  of  the  Open 
Door  in  letter  and  spirit,  that  she  had  announced  to  the  Council 
that  her  policy  was  to  restore  full  sovereignty  in  the  Shantung 
Peninsula  to  China,  and  that  she  would  not  make  any  exclusive 
economic  use  of  the  port  of  Tsingtao  or  any  discriminatory  rates, 
rules  or  regulations  for  the  railways.  Japan  had  also  stated  to 
the  Council  that  she  would  at  the  earliest  possible  moment  hand 
back  all  the  political  rights  to  China  and  withdraw  all  Japanese 
troops  from  Shantung.  In  the  arrangement  of  this  settlement 
everything  had  been  made  so  clear  that  no  undesirable  references 
could  be  drawn  therefrom  by  Japan  in  regard  to  her  position  in 
the  affairs  of  the  Far  East. 

After  listening  to  the  outline  of  the  proposed  settlement  com- 
municated to  them  by  Mr.  Balfour,  the  Chinese  Delegates 
expressed  their  disappointment,  and  requested  him  to  be  good 
enough  to  ask  the  Council  of  Three  to  send  them  at  their  earliest 
convenience  a  copy  of  the  draft  clause  to  be  inserted  in  the 
Peace  Treaty  and  of  the  records  of  the  proceedings  of  the  Council 
bearing  on  the  Kiaochow-Shantung  question. 


AT  THE  VERSAILLES  PEACE  CONFERENCE     125 

The  Chinese  Delegation  have  carefully  considered  the  above 
outline  of  the  proposed  settlement.  They  would  have  waited 
for  the  complete  records  before  expressing  their  view  of  it,  but 
for  reasons  of  urgency,  assuming  that  the  above  is  a  correct 
summary  of  what  Mr.  Balfour  explained  to  them,  the  Chinese 
Delegation  feel  constrained  to  express  their  keen  disappoint- 
ment, which  will  be  shared  in  all  its  intensity  by  the  Chinese 
Nation,  and  enter  a  formal  protest  in  the  name  of  justice. 

The  declaration  of  war  by  China  against  Germany  and 
Austria-Hungary  on  August  14,  1917,  expressly  abrogated  all 
treaties,  agreements  and  conventions  between  China  and  those 
Powers,  a  fact  which  was  officially  notified  to,  and  taken  cogniz- 
ance of,  by  the  Allied  and  Associated  Powers.  By  this  declara- 
tion, the  rights  and  privileges  formerly  enjoyed  in  the  Province 
of  Shantung  became  null  and  void  and  China  as  the  sovereign 
power  in  that  province,  became  automatically  reinvested  of  them. 
It  is  difficult  to  see  on  what  grounds  these  rights  can  be  taken 
from  China  and  transferred  to  Japan. 

Japan  has  presumably  based  her  claim  on  the  agreements  of 
1915  and  on  the  notes  of  1918  with  China.  The  1915  agree- 
ments were,  however,  concluded  by  China  under  coercion  of  a 
Japanese  ultimatum  threatening  war.  The  Chinese  Government 
was  obliged  to  exchange  the  1918  notes  because  the  continued 
presence  of  the  Japanese  troops  in  the  interior  of  Shantung 
and  the  unauthorized  establishment  of  Japanese  civil  adminis- 
trative bureaux  which  attempted  to  govern  Shantung  as 
Japanese  territory,  aroused  such  popular  indignation  and 
opposition  that  no  other  course  seemed  open  to  the  Chinese 
Government  to  rid  the  Province  of  their  presence. 

If  the  Shantung  peninsula  is  to  be  restored  in  full  sover- 
eignty, according  to  the  proposed  settlement,  to  China,  the 
reason  does  not  appear  clear  why  recourse  should  be  had  to  two 
steps  instead  of  one,  why  the  initial  transfer  should  be  made  to 
Japan  and  then  leave  it  to  her  to  " voluntarily  engage"  to 
restore  it  to  China. 

Notwithstanding  the  proposed  division  of  political  and  eco- 
nomic right,  the  substitution  of  Japan  for  Germany  in  Shan- 
tung so  entrenches  Japanese  influence  in  this  Province  as  to 
expose  China  to  a  greater  menace  than  before  because  Japan 
is  nearer  to  China  than  Germany. 

China,  in  coming  to  the  Peace  Conference,  has  relied  on  the 
Fourteen  Points  set  forth  by  President  Wilson  in  his  address 


126  THE  SHANTUNG  QUESTION 

>• 

to  Congress  on  the  8th  of  January,  1918,  and  the  principles  laid 
down  in  his  subsequent  addresses,  and  formally  adopted  by  the 
Powers  associated  against  Germany.  She  has  relied  on  the 
spirit  of  honorable  relationship  between  states  which  is  to 
open  a  new  era  in  the  world  and  inaugurate  the  League  of 
Nations.  She  has  relied,  above  all,  on  the  justice  and  equity 
of  her  case.  The  result  has  been  to  her  a  grievous  disappoint- 
ment. 

The  Chinese  Delegation  feel  it  to  be  their  duty  to  register  a 
formal  protest  with  the  Council  of  Three  against  the  proposed 
settlement  of  the  Kiaochow- Shantung  question. 

I  have  the  honor  to  be,  Sir, 

Your  most  obedient  humble  servant, 

(Signed)  Lou  TSENG  TSIANG. 
To  the  President,  the  Council  of  Three,  Peace  Conference,  Paris. 

On  May  5,  Baron  Makino,  in  an  attempt  to  explain 
what  Japan  proposed  to  do  with  the  German  con- 
cessions in  Shantung  thus  awarded  her,  issued  a 
statement  to  the  press,  in  which  he  endeavoured  to 
point  out,  in  vague  terms,  that  Japan  would  restore 
Shantung  to  China  "in  full  sovereignty,"  retaining 
only  the  economic  rights,  formerly  granted  to  Ger- 
many, and  the  right  to  establish  a  settlement  under 
the  usual  conditions  at  Tsingtao. 

On  May  6,  a  Plenary  Session  was  held,  in  which 
the  summary  of  the  "conditions  of  peace,"  including 
the  Shantung  settlement,  was  read  to  the  delegates 
of  all  Powers  participating  in  the  Conference.  At 
the  Session,  Mr.  Lou  Tseng-tsiang,  head  of  the 
Chinese  delegation,  entered  a  formal  protest,  which 
was  also  designed  as  a  reservation,  notwithstanding 
that  diplomatic  influence  had  been  brought  to  bear 
upon  the  Chinese  delegates  to  prevent  it.  Mr.  Lou 
said: 

"The  Chinese  delegation  beg  to  express  their  deep  disappoint- 
ment at  the  settlement  proposed  by  the  Council  of  the  Prime 


AT  THE  VERSAILLES  PEACE  CONFERENCE     127 

Ministers.  They  also  feel  certain  that  this  disappointment  will 
be  shared  in  all  its  intensity  by  the  Chinese  nation.  The  pro- 
posed settlement  appears  to  have  been  made  without  giving  due 
regard  to  the  consideration  of  right,  justice,  and  the  national 
security  of  China — consideration  which  the  Chinese  delegation 
emphasised  again  and  again  in  their  hearings  before  the  Council 
of  the  Prime  Ministers  against  the  proposed  settlement.  In 
the  hope  of  having  it  revised,  and  if  such  revision  cannot  be 
had,  they  deem  it  their  duty  to  make  a  reservation  on  the  said 
clauses  now." 


This  reservation  was  made  in  accordance  with 
the  instructions  which  the  Chinese  delegation  had 
received  from  China.  It  marked  the  first  move  by 
the  Chinese  delegation  to  avert  the  Shantung  settle- 
ment which  was  about  to  be  perpetuated. 

On  May  7,  the  terms  of  peace  were  handed  to  the 
Germans.  On  the  same  day,  a  copy  of  the  pre- 
liminaries of  peace  was  sent  to  the  Chinese  delegation. 
This  was  the  first  opportunity  that  the  Chinese  had 
in  examining  the  Shantung  provisions  in  their 
details.  It  was  suggested  at  the  time  that  Mr. 
Harukazu  Nagaoka,  the  expert  draftsman  attached 
to  the  Japanese  delegation,  prepared  the  Shantung 
clauses,  which  were  finally  embodied  in  the  Treaty 
of  Versailles.  It  was  impossible,  however,  to  con- 
firm this  fact,  even  in  official  circles.  It  was  defi- 
nitely known  that  the  Drafting  Committee  of  the 
Conference,  upon  direction  from  the  Council  of 
Three,  prepared  the  Shantung  articles  in  accordance 
with  the  decision  which  it  had  reached.  Whether  or 
not  the  Japanese  expert  was  a  member  of  the  Draft- 
ing Committee  of  the  Conference  it  was  difficult  to 
say.  And  it  was  equally  difficult  to  ascertain  whether 
he  was,  even  as  a  member  of  the  Committee,  largely 


128  THE  SHANTUNG  QUESTION 

responsible  for  the  Shantung  provisions.  At  any 
rate,  those  who  were  responsible  for  the  Shantung 
clauses  did  not  consult,  apparently,  the  provisions 
prepared  and  submitted  to  the  Conference  by  the 
Chinese  delegation  to  be  inserted  in  the  preliminaries 
of  peace  with  Germany.* 

Then  followed  a  period  of  careful  deliberation  and 
active  planning — to  decide  upon  China's  best  course 
to  take  at  the  Conference  under  the  circumstances. 
Should  China  sign  the  Treaty  of  Peace  with  Ger- 
many ?  Or,  should  she  bolt  the  Conference  ?  It  has 
since  transpired  that  what  the  Chinese  delegates  had 
at  first  proposed  to  do  was  to  sign  the  Treaty  of 
Peace,  with  this  reservation  over  their  signatures: 
" Subject  to  the  reservation  made  at  the  Plenary 
Session  of  May  6,  1919,  relative  to  the  question  of 
Shantung  (Articles  156,  157  and  158)."  This  deci- 
sion was  communicated  to  M.  Clemenceau,  President 
of  the  Conference,  in  the  following  letter : 

DELEGATION  CHINOISE  AU  CONGRESS  DE  LA  PAIX 

May  26,  1919. 
Mr.  President: 

The  Council  of  Prime  Ministers  having  announced  on  April 
30th  their  conclusion  in  respect  of  the  question  of  the  disposal 
of  German  rights  in  the  Chinese  Province  of  Shantung,  I,  in 
behalf  of  the  Chinese  Delegation,  addressed  to  the  Council  a 
formal  protest  against  it  on  May  4th.  Subsequently  at  the 
Plenary  Session  of  the  Preliminary  Peace  Conference  on  May 
6th  when  a  summary  of  the  Conditions  of  Peace  with  Germany 
was  read,  I  made  a  reservation  on  the  clauses  relating  to  the  dis- 
fiosal  of  German  rights  in  Kiaochow-Shantung,  which  appeared 
to  be  based  exclusively  upon  the  Council's  conclusion. 

In  the  evening  of  May  7th,  after  the  German  Plenipotentiaries 
had  been  handed  the  full  text  of  the  * '  Conditions  of  Peace, ' '  the 

*  Vide  Appendix  I. 


AT  THE  VERSAILLES  PEACE  CONFERENCE     129 

Chinese  Delegation  received  a  copy  of  the  text  from  the  Con- 
ference. Examination  of  Articles  156,  157  and  158,  which  deal 
with  the  Kiaochow-Shantung  question,  makes  China's  dis- 
appointment all  the  more  poignant.  Not  only  no  provision  is 
made  therein  for  safeguarding  the  rights  of  China  as  the  terri- 
torial sovereign  over  the  entire  Province  of  Shantung  and 
insuring  the  welfare  of  the  millions  of  Chinese  people  who  have 
inhabited  it  from  time  immemorial,  but  the  said  three  Articles 
are  also  couched  in  such  language  as  unmistakably  to  convey  the 
painful  impression  to  the  Chinese  people,  who  yield  to  none  in 
their  love  for  their  fatherland,  that  the  transfer  of  all  the  rights, 
title  and  privileges  provided  therein,  while  nominally  asked  of 
Germany,  is  in  reality  to  be  made  only  at  the  expense  of  a  loyal 
partner  in  the  war  on  the  side  of  the  Allied  and  Associated 
Powers. 

The  announcement  of  the  Council's  conclusion  on  the  Kiao- 
chow-Shantung question  has  caused  a  nation-wide  disappoint- 
ment in  China  and  evoked  voices  of  protest  from  the  Chinese 
people  everywhere.  The  Chinese  Delegation  have  received  mes- 
sages from  the  Parliament,  the  Provincial  Legislatures,  the 
Chambers  of  Commerce,  Educational  and  Agricultural  Associa- 
tions, and  other  important  organizations  both  in  China  and 
abroad,  urging  the  Chinese  Delegates  not  to  sign  the  Treaty  of 
Peace  with  Germany. 

In  view  of  this  unmistakable  indication  of  the  views  of  the 
Chinese  people,  the  Chinese  Government  have  little  choice  as 
to  the  course  open  to  them  to  take  vis-a-vis  the  Treaty  of  Peace 
with  Germany;  but  sincerely  desirous  to  avoid,  if  possible,  any 
step  capable  of  being  construed  as  marring  the  unity  of  purpose 
of  the  Allied  and  Associated  Powers  in  restoring  peace  to  the 
world,  as  in  prosecuting  the  war  against  Germany,  they  have 
decided  to  sign  the  Treaty  of  Peace  with  Germany  under  the 
reservation  already  made  at  the  Plenary  Session  held  on  May 
6th,  in  respect  of  the  clauses  relating  to  the  transfer  of  German 
rights  in  Shantung.  In  coming  to  this  decision,  the  Chinese 
Government  desire  to  assure  you,  however,  that  their  objection 
is  not  to  the  renunciation  by  Germany  of  her  rights,  title,  and 
privileges  in  Shantung,  but  solely  to  such  renunciation  being 
made  in  favor  of  Japan,  to  the  prejudice  of  China's  sovereign 
rights. 

Pursuant  to  instructions  from  my  Government,  I  have  the 
honor,  therefore,  to  inform  you  that  the  Chinese  plenipoten- 


130  THE  SHANTUNG  QUESTION 

tiaries  will  sign  for  the  Republic  of  China  the  Treaty  of  Peace 
with  Germany  under  the  reservation  made  and  recorded  in  the 
minutes  of  the  proceedings  of  the  Plenary  Session  of  the  Pre- 
liminary Peace  Conference  on  May  6,  1919. 

I  avail  myself  of  this  opportunity  to  renew  to  you,  Sir,  the 
assurances  of  my  highest  consideration. 

Lou  TSENG  TSIANG. 
Son  Excellence  MONSIEUR  CLEMENCEAU, 

President  of  the  Peace   Conference. 

On  May  28,  the  receipt  of  the  foregoing  communi- 
cation was  acknowledged  by  the  Secretary  General 
of  the  Conference,  who  stated  that  it  had  been  trans- 
mitted to  the  Principal  Powers  represented  in  the 
Supreme  Council.  For  almost  a  month,  the  Chinese 
delegation  received  no  word  from  the  Conference. 
On  June  24,  the  Chinese  delegation  was  informed  by 
the  Secretary  General  on  behalf  of  the  President  of 
the  Conference  that  reservations  in  the  text  of  the 
Treaty  of  Peace  were  not  permissible. 

In  this  connection,  it  should  also  be  noted  that,  on 
May  28,  the  Chinese  delegation  again  wrote  to  the 
Council  of  Three,  asking  for  a  copy  of  the  minutes  of 
its  proceedings  bearing  on  the  Kiaochow- Shantung 
question.  In  his  reply,  June  5,  Sir  Maurice  A.  P. 
Hankey,  Secretary  to  the  Council,  stated  that  the 
minutes  of  the  Council  were  distributed"  only  to  the 
persons  actually  present  at  the  meetings.  He  was 
authorised,  however,  to  prepare  a  memorandum  "for 
the  strictly  confidential  use  of  the  Chinese  delega- 
tion," based  on  the  records  of  the  Council  and 
containing  assurances  given  by  the  Japanese.  Ac- 
cording to  this  memorandum,*  which  was  virtually  a 
transcript  of  the  minutes  of  the  Council  of  Three,  the 

*  Vide  Appendix  L.  This  document  has  never  been  officially  given  out. 
It  has  remained  presumably  among  the  secret  and  confidential  papers  and 
records  of  the  Peace  Conference  at  Versailles. 


AT  THE  VERSAILLES  PEACE  CONFERENCE      131 

Japanese  delegates  had  reserved  the  right  to  fall 
back,  in  the  last  resort,  on  the  Chino-Japanese 
treaties  of  1915  and  the  secret  agreements  of  1918, 
for  a  settlement  of  the  Shantung  question.  Accord- 
ing to  the  same  document,  President  Wilson  who, 
together  with  Clemenceau  and  Lloyd  George,  heard 
the  pleadings  of  the  Japanese  delegates  and  finally 
decided  the  case,  expressed  the  hope  that  Japan, 
instead  of  appealing  to  these  so-called  treaties  of 
1915  and  1918,  should  voluntarily  apply  for  media- 
tion by  the  Council  of  the  League  of  Nations.  "Pres- 
ident Wilson  insisted  that  nothing  he  had  said  should 
be  construed  as  a  recognition  of  the  notes  exchanged 
between  Japan  and  China  (the  treaties  of  1915), 
because  they  were  based  upon  original  demands 
against  which  the  Government  of  the  United  States 
had  earnestly  protested."  The  Japanese  delegates 
pointed  out,  however,  that  even  if  the  matter  were 
submitted  to  the  League  of  Nations,  Japan  neverthe- 
less must  reserve  her  right  to  base  herself  on  the 
same  agreements  and  treaties. 

When  the  Chinese  delegates  were  refused  the  right 
to  insert  a  simple  reservation  over  their  signatures, 
they  proposed  to  make  it  an  annex  to  the  Treaty.  As 
no  reservation  of  any  kind  was  to  be  permitted  in  the 
text  of  the  Treaty,  the  Chinese  delegates  were  again 
refused.  At  noon  time,  Saturday,  June  28,  about 
three  hours  before  the  Versailles  meeting  where  the 
Treaty  of  Peace  with  Germany  was  to  be  signed,  Mr. 
Wu  Wei-teh,  Chinese  Minister  to  France  and  one  of 
the  Chinese  delegates,  called  at  Quai  D' Or  say  to  pre- 
sent a  copy  of  the  reservation  as  an  essential  prelim- 
inary to  China's  signing  of  the  Treaty.  It  happened 


132  THE  SHANTUNG  QUESTION 

that  M.  Clemenceau  was  then  at  a  conference  with 
President  Wilson  at  the  Place  des  Etats-TJnis.  M. 
Dutasta,  Secretary  General  of  the  Peace  Conference, 
who  received  the  Chinese  representative  at  the  For- 
eign Office,  read  the  reservation  to  M.  Clemenceau  on 
the  telephone,  who  evidently  repeated  it  to  President 
Wilson.  In  a  few  minutes,  M.  Dutasta  reported  that 
neither  M.  Clemenceau  nor  President  Wilson  ap- 
proved of  China's  proposed  reservation  as  a  pre- 
liminary to  signing.  In  the  meantime,  the  same 
reservation  was  submitted  to  Premier  Lloyd  George 
with  the  same  result.  The  reservation  for  which  the 
Chinese  delegates  were  anxious  to  gain  the  official 
recognition  of  the  Conference  was  in  the  nature  of  a 
declaration,  pointing  out  that  their  signing  of  the 
Treaty  was  not  to  be  taken  to  preclude  China  from 
demanding  a  reconsideration  of  the  Shantung  ques- 
tion. It  reads : 

RESERVATION 

In  proceeding  to  sign  the  Treaty  of  Peace  with  Germany  today, 
the  undersigned,  plenipotentiaries  of  the  Republic  of  China, 
considering  as  unjust  Articles  156,  157  and  158  therein,  which 
purport  to  transfer  the  German  rights  in  the  Chinese  Province  of 
Shantung  to  Japan  instead  of  restoring  them  to  China,  the 
rightful  sovereign  over  the  territory  and  a  loyal  co-partner  in 
the  war  on  the  side  of  the  Allied  and  Associated  Powers,  hereby 
declare,  in  the  name  and  on  behalf  of  their  Government,  that  their 
signing  of  the  Treaty  is  not  to  be  understood  as  precluding  China 
from  demanding  at  a  suitable  time  the  reconsideration  of  the 
Shantung  question,  to  the  end  that  the  injustice  to  China  may 
be  rectified  in  the  interest  of  permanent  peace  in  the  Far  East. 
(Signed)  Lou  TSENG  TSIANG. 

CHENGTIEN  THOMAS  WANG. 

June  28,  1918. 
To  His  Excellency  GEORGES  CLEMENCEAU, 

President  of  the  Peace  Conference, 
Versailles. 


AT  THE  VERSAILLES  PEACE  CONFERENCE      133 

This  suggestion  was  again  refused,  on  the  ground 
that  no  reservation  of  any  kind  should  be  permitted 
before  the  Treaty  was  signed.  China  was  given  the 
right  to  make  a  declaration  after  the  signing  of  the 
Treaty.  The  Chinese  delegates  questioned,  of  course, 
the  validity  of  a  declaration  made  after  the  signing 
of  the  Treaty.  In  a  spirit  of  compromise,  the  Chinese 
proposed  a  modification  of  the  language  in  their 
declaration,  and  urged  the  right  to  make  it  in 
advance  of  signing.  But  the  Principal  Powers  were 
impervious. 

"  After  failing  in  all  these  earnest  attempts  at 
conciliation,  and  after  seeing  every  honourable  com- 
promise rejected,  the  Chinese  delegation  had  no 
course  open  to  them  except  to  adhere  to  the  path  of 
duty  to  their  country. "  The  Chinese  delegates 
decided  not  to  sign  the  Treaty  of  Peace  with  Ger- 
many. This  decision  was  communicated  to  M. 
Clemenceau,  President  of  the  Conference,  in  the 
following  letter : 


DELEGATION  CHINOISE 

Pursuant  to  instructions  from  its  Government,  the  Chinese 
Delegation  notified  you  by  letter  of  May  26,  1919,  that  the 
Chinese  Plenipotentiaries  would  sign  for  the  Republic  of  China 
the  Treaty  of  Peace  with  Germany  under  the  reservation  made 
by  the  Chinese  Delegation  and  recorded  in  the  Protocol  of  the 
Plenary  Session  of  the  Preliminary  Peace  Conference  on  May 
6,  1919,  relating  to  Articles  156,  157,  and  158  in  the  said  Treaty 
relating  to  the  Chinese  Province  of  Shantung. 

The  Supreme  Council  of  the  Conference  having  ruled  to  admit 
no  reservation  of  any  kind,  either  in  or  outside  the  text  of  the 
Treaty,  and  having  declined  to  accept  before  the  signing  of  the 
Treaty  every  compromise  compatible  with  their  sense  of  right  and 
justice,  even  a  declaration  to  the  effect  that  the  signature  of  the 


134  THE  SHANTUNG  QUESTION 

Chinese  plenipotentiaries  was  not  to  be  understood  as  precluding 
China  from  demanding  at  a  suitable  moment  the  reconsideration 
of  the  Shantung  question,  the  undersigned,  plenipotentiaries  of 
the  Republic  of  China,  beg  to  inform  you  that  they  do  not  feel 
warranted  to  sign  the  Treaty  at  Versailles  today.  They  are 
communicating  the  latest  decision  of  the  Supreme  Council  to 
their  Government  and  meanwhile  beg  hereby  to  reserve,  in  the 
name  and  on  behalf  of  their  Government,  the  right  of  the 
Republic  of  China  to  take  a  final  decision  vis-a-vis  the  Treaty 
of  Peace  with  Germany. 

(Signed)  Lou  TESNG  TSIANG. 

CHENGTIEN  THOMAS  WANG. 

Paris,  June  28,  1919. 
To  His  Excellency  GEORGES  CLEMENCEAU, 

President  of  the  Peace  Conference. 


This  letter  and  the  above  copy  of  reservation  were 
returned  to  the  Chinese  delegation  by  the  Secretary 
General  of  the  Conference  on  the  day  they  were  deliv- 
ered (June  28) .  It  was  in  this  fashion  that  the  Peace 
Conference  at  Versailles,  dominated  largely  by  Pres- 
ident Wilson,  Premier  Lloyd  George  and  Premier 
Clemenceau,  reached  the  so-called  Shantung  settle- 
ment, then  rejected  the  plea  of  the  Chinese  delegates 
to  be  allowed  to  sign  the  Treaty  of  Peace  with  Ger- 
many with  a  reservation,  and  finally  refused,  by 
returning  the  above  two  official  notes  to  the  Chinese 
delegation,  China's  just  pleas  a  proper  place  in  the 
records  of  the  Peace  Conference. 

On  June  28,  at  the  ceremony  of  the  signing  of  the 
Treaty,  the  Chinese  delegates  were  conspicuous  by 
their  absence.  They  did  not  sign  it.  Thus  the 
Shantung  settlement  embodied  in  the  Treaty  could 
not  be  binding  upon  China.  In  the  evening  of  that 
day  (June  28,  1919),  the  Chinese  delegation  issued 
the  following  statement  to  the  press : 


AT  THE  VERSAILLES  PEACE  CONFERENCE     135 

Feeling  the  injustice  of  the  settlement  of  the  Shantung  ques- 
tion made  by  the  Conference,  the  Chinese  Delegation  sent  a 
formal  protest  to  the  Council  of  Prime  Ministers  under  date  of 
May  4,  1919,  and  made  a  reservation  at  the  Plenary  Session  on 
May  6th  last  vis-a-vis  the  clauses  concerning  that  question  in  the 
Conditions  of  Peace  which,  taking  that  settlement  for  their 
basis,  purport  to  transfer  German  rights  in  the  Chinese  Province 
of  Shantung  to  Japan  instead  of  restoring  them  to  China,  the 
rightful  sovereign  over  the  territory  and  a  loyal  co-partner  in  the 
war  on  the  side  of  the  Allied  and  Associated  Powers. 

The  announcement  of  the  settlement  evoked  a  nation-wide 
protest  in  China,  which  was  participated  in  by  the  Chinese 
people  in  every  part  of  the  world.  In  view  of  the  united  opposi- 
tion of  public  opinion,  the  Chinese  Government  had  no  course 
open  to  them  except  to  decline  to  accept  the  clauses  in  question. 
To  this  effect  they  instructed  the  Chinese  Delegation  at  Paris, 
who  accordingly  notified  the  President  of  the  Peace  Conference 
on  May  26th  last  in  a  formal  communication  that  they  would 
sign  the  Treaty  of  Peace  with  Germany  subject  to  the  reserva- 
tion made  on  May  6th  last. 

On  May  28th  last,  the  Secretary  General  of  the  Conference 
acknowledged  the  receipt  of  the  notification  and  stated  that  it 
had  been  transmitted  to  the  Delegations  of  the  Principal  Allied 
and  Associated  Powers  represented  in  the  Supreme  Council. 
From  that  time  on  the  Chinese  Delegation  received  no  word  from 
the  Conference  on  the  matter  of  reservation. 

It  was  not  until  the  24th  instant  that  the  Chinese  Delegation 
was  informed  by  the  Secretary  General  on  behalf  of  the  Presi- 
dent of  the  Conference  that  reservations  in  the  text  of  the 
Treaty  of  Peace  were  not  permissible,  for  want  of  precedent, 
though  there  is  a  notable  precedent  in  the  Treaty  of  Vienna, 
of  June  9,  1815,  which  was  signed  by  the  Swedish  plenipotentiary 
with  a  reservation  made  under  his  signature  on  three  articles  in 
the  treaty. 

What  the  Chinese  Delegates  first  proposed  to  do  was  merely  to 
write  in  the  treaty  over  their  signatures  the  words  "  Subject  to 
the  reservation  made  at  the  Plenary  Session  of  May  6,  1919, 
relative  to  the  question  of  Shantung  (Arts.  156,  157  and  158)." 
When  this  insertion  was  refused,  the  Chinese  Delegation  pro- 
posed to  make  the  reservation  an  annex  to  the  treaty.  On  this 
being  refused,  they  proposed  to  send  to  the  President  of  the  Con- 
ference, before  proceeding  to  Versailles,  a  separate  declaration 


136  THE  SHANTUNG  QUESTION 

in  writing  to  the  effect  that  the  Chinese  plenipotentiaries  would 
sign  the  treaty  subject  to  the  reservation  of  May  6th,  which  was 
intended  to  enable  China,  after  the  signing  of  the  treaty,  to  ask 
for  the  reconsideration  of  the  Shantung  question.  This,  again, 
was  refused,  and  the  refusal  was  explained  on  the  ground  that 
the  Supreme  Council  had  decided  to  admit  no  reservation  of  any 
kind  in  the  text  of  the  treaty,  or  separate,  before  it  was  signed, 
but  that  the  Delegation  could  send  him  a  declaration  after  its 
signature. 

As  the  validity  of  a  declaration  made  after  the  signing  of 
the  treaty  would  be  doubtful,  the  Delegation  urged  the  right 
of  making  one  in  advance  of  it;  but  out  of  deference  to  the 
decision  of  the  Council  to  admit  no  reservations  whatever,  it 
proposed  a  further  modification  of  the  wording,  so  the  signing 
of  the  treaty  by  the  Chinese  plenipotentiaries  might  not  be 
understood  as  precluding  China  from  asking  at  a  suitable 
moment  for  the  reconsideration  of  the  Shantung  question.  This 
proposal,  to  the  surprise  of  the  Delegation,  was  once  again 
refused. 

After  failing  in  all  these  earnest  attempts  at  conciliation,  and 
after  seeing  every  honorable  compromise  rejected,  the  Chinese 
Delegation  had  no  course  open  to  them  except  to  adhere  to  the 
path  of  duty  to  their  country.  Rather  than  accepting  by  their 
signatures  articles  156,  157,  and  158  in  the  treaty,  against  which 
their  sense  of  right  and  justice  militated,  they  refrained  from 
signing  the  treaty  altogether. 

The  Chinese  plenipotentiaries  regret  having  had  to  take  a 
course  which  appears  to  mar  the  solidarity  of  the  Allied  and 
Associated  Powers;  but  they  were  firmly  of  opinion,  however, 
that  the  responsibility  for  this  step  rests,  not  with  themselves, 
who  had  no  other  honorable  course  to  pursue,  but  rather  with 
those,  who,  it  is  felt,  unjustly  and  unnecessarily  deprived  them 
of  the  right  of  making  a  declaration  to  safeguard  against  any 
interpretation  which  might  preclude  China  from  asking  for  a 
reconsideration  of  the  Shantung  question  at  a  suitable  moment 
in  future,  in  the  hope  that  the  injustice  to  China  might  be 
rectified  later  in  the  interest  of  permanent  peace  in  the  Far 
East. 

The  Peace  Conference  having  denied  China  justice  in  the 
settlement  of  the  Shantung  question  and  having  today  in  effect 
prevented  them  from  signing  the  treaty  without  their  sacrificing 
their  sense  of  right,  justice  and  patriotic  duty,  the  Chinese 


AT  THE  VERSAILLES  PEACE  CONFERENCE     137 

Delegates  submit  their  case  to  the  impartial  judgment  of  the 
world.* 


Underlying  all  this  Shantung  situation  and 
China's  refusal  to  sign  the  Treaty,  there  was,  at  the 
time,  a  serious  misunderstanding,  for  which  Japan 
was,  it  was  asserted,  mainly  responsible.  The  Coun- 
cil of  Three  was  led  by  the  Japanese  delegates  to 
believe  that  the  Chinese  delegates  were  only  "  bluff- 
ing" when  they  declared  that  they  would  not  sign 
the  Treaty  without  a  reservation  on  the  Shantung 
provisions.  Japan  strongly  objected,  of  course,  to 
the  reservation,  while  the  "Big  Three"  were  at  first 
indifferent  about  it.  It  was  a  well-known  fact  that 
during  the  two  months  following  the  announcement 
of  the  Shantung  settlement  much  pressure  was 
brought  to  bear  upon  the  Chinese  delegates  at  Paris, 
and  upon  the  Chinese  Government  at  Peking,  to 
induce  them  to  affix  their  signatures  to  the  Treaty 
unconditionally,  and  without  reservation. 


*  The  New  York  Times  made  this  comment  on  the  Chinese  statement: 

The  statement  of  the  Chinese  delegates,  explaining  their  refusal  to  sign 
the  peace  treaty,  is  dignified,  and  in  striking  good  temper  considering 
how  deep  is  the  grievance  that  China  suffers  in  the  decision  of  her  Allies 
to  withhold  from  her,  and  bestow  upon  Japan,  that  portion  of  her  ter- 
ritory and  sovereign  rights  which  have  been  wrongfully  in  the  possession 
of  Germany. 

Whatever  the  considerations  of  expediency  that  prevailed  to  induce  the 
Conference  of  Paris  to  transfer  to  Japan  Germany's  ill-gotten  "rights, 
title  and  privileges"  in  the  Shantung  province,  was  there  a  representative 
of  any  nation  at  Versailles,  other  than  the  beneficiary  of  the  bargain, 
who  did  not  sympathise  with  the  attitude  of  the  Chinese?  French,  British, 
Italian,  American,  every  one  of  them  must  feel  that  in  the  same  circum- 
stances he  would  have  refused  to  sign  what  Mr.  Wilson,  in  a  new  message 
to  his  fellow  countrymen,  eloquently  styles  the  "great  charter  for  a  new 
order  of  affairs  in  the  world." 

So  far  as  China's  interests  are  concerned,  the  "charter"  confirms  an  old 
and  bad  order.  The  German  highwayman  is  compelled  to  give  up  his 


138  THE  SHANTUNG  QUESTION 

NOTE  I 

For  an  account  of  the  exact  circumstances  under 
which  the  so-called  Shantung  decision  was  reached  at 
the  Versailles  Peace  Conference,  none  can  excel,  per- 
haps, that  which  was  given  by  Mr.  Ray  Stannard 
Baker  in  his  book, ' '  What  Wilson  Did  at  Paris. ' '  It 
should  be  recalled  that  Mr.  Baker  headed  the  Intelli- 
gence Bureau  of  the  American  delegation,  and  was  in 
the  confidence  of  President  Wilson.  What  he  had  to 
say  about  the  Shantung  disposition,  no  matter  how 
accurate  it  might  be,  had,  however,  the  appearance 
of  an  apology.  Thus  he  said : 

Of  all  the  important  decisions  at  the  Peace  Conference  none 
worried  the  President  so  much  as  that  relating  to  the  disposi- 
tion of  the  Shantung  peninsula — and  none,  finally,  satisfied  him 
less.  Not  one  of  the  problems  he  had  to  meet  at  Paris,  serious 
as  they  all  were,  did  he  take  more  personally  to  heart  than  this. 

plunder,  but  it  is  not  restored  to  the  owner — it  is  handed  over  to  an 
unfriendly  neighbour. 

The  war  freed  Alsace-Lorraine  from  Germany,  and  restored  the  prov- 
inces to  France;  freed  Poland  and  gave  it  to  the  Poles;  freed  Bohemia 
and  gave  it  to  the  Bohemians;  freed  Southern  Austria  and  gave  it  to  the 
Jugoslavs — although  they  had  fought  as  Austrians.  But  China's  prov- 
ince taken  from  the  Germans  is  given  to  the  Japanese. 

The  Chinese  delegation,  weeks  ago,  ceased  to  beg  that  the  Shantung 
articles  in  the  treaty  draft  be  stricken  out,  or  modified.  In  the  end  all 
they  asked  was  that  they  be  allowed  to  make  a  reservation  when  affixing 
their  signatures.  They  were  met  with  a  refusal  as  flat  as  that  delivered 
to  the  enemy  when  he  appealed  for  the  privilege  of  reserving  on  certain 
articles.  How  then  could  they  have  signed  without,  as  their  statement 
reads,  "sacrificing  their  sense  of  right,  justice  and  patriotic  duty?" 

It  is  safe  to  say  that  the  Government  of  the  United  States  under  any 
Administration  prior  to  Mr.  Wilson's  would  never  have  consented  to  such 
bargaining  away  of  the  rights  of  a  friendly  nation.  Mr.  Wilson's  acquies- 
cence in  it  remains  to  be  explained.  Apparently  he  was  consulted, 
although — lacking  dependable  information  from  the  secret  deliberations 
at  Paris — a  suspicion  has  been  growing  in  the  minds  of  Mr.  Wilson's 
fellow-countrymen  that  his  influence  on,  if  not  his  interest  in,  the  treaty 
terms  came  to  an  end  after  he  obtained  the  approval  of  the  conference 
to  his  League  of  Nations  project. 


AT  THE  VERSAILLES  PEACE  CONFERENCE     139 

He  told  me  on  one  occasion  that  he  had  been  unable  to  sleep  on 
the  previous  night  for  thinking  of  it. 

Those  last  days  before  the  treaty  was  finished  were  among 
the  hardest  of  the  entire  conference.  The  most  difficult  and 
dangerous  problems  had  inevitably  been  left  to  the  last,  and  had 
all  to  be  finally  settled  in  those  crowded  days  of  late  April. 

Consider,  for  a  moment,  the  exact  situation  at  Paris  on  April 
29,  when  the  Japanese-Chinese  crisis  reached  the  explosive 
point. 

It  was  on  that  very  day  that  the  German  delegates  were 
coming  morosely  into  Versailles,  ready  for  a  treaty  that  was 
not  yet  finished.  The  three — for  Orlando  had  then  withdrawn 
from  the  conference — had  been  gradually  lengthening  their 
sessions;  the  discussions  were  longer  and  more  acrimonious. 
They  were  tired  out.  Only  six  days  before,  on  April  23,  the 
High  Council  had  been  hopelessly  deadlocked  on  the  Italian 
question.  The  President  had  issued  his  bold  message  to  the  world 
regarding  the  disposition  of  Fiume,  and  the  Italian  delegation 
departed  from  Paris  with  the  expectation  that  their  withdrawal 
would  either  force  the  hands  of  the  conference  or  break  it  up. 

While  this  crisis  was  at  its  height  the  Belgian  delegation,  which 
had  long  been  restive  over  the  non-settlement  of  Belgian  claims 
for  reparations,  became  insistent.  They  had  no  place  in  the 
Supreme  Council  and  they  were  worried  lest  the  French  and 
British — neither  of  whom  could  begin  to  get  enough  money 
out  of  Germany  to  pay  for  its  losses — would  take  the  lion's 
share  and  leave  Belgium  unrestored.  The  little  nations  were 
always  worried  at  Paris  lest  the  big  ones  take  everything  and 
leave  them  nothing!  Very  little  appeared  in  the  news  at  the 
time  concerning  the  Belgian  demands,  but  they  reached  prac- 
tically an  ultimatum ;  if  Belgium  were  not  satisfied  she  also  would 
withdraw  from  the  conference  and  refuse  to  sign  the  treaty. 

It  was  at  this  critical  moment  that  the  Chinese-Japanese 
question  had  to  be  settled.  It  had  to  be  settled  because  the 
disposition  of  German  rights  in  China  (unlike  Italian  claims 
in  the  Adriatic)  had  to  go  into  the  German  treaty  before  it  was 
presented  to  Brockdorff-Rantzau  and  his  delegates  at  Versailles ; 
and  because  the  Japanese  would  not  sign  the  treaty  unless  it 
was  settled.  The  defection  of  Japan,  added  to  that  of  Italy  and 
the  possible  withdrawal  of  Belgium,  would  have  made  the  situa- 
tion desperate. 

The  two  principal  things  that  Japan  wanted  at  the  Peace 


140  THE  SHANTUNG  QUESTION 

Conference  were:  First,  a  recognition  in  the  Covenant  of  the 
League  of  Nations  of  the  equality  of  the  nations  and  the  just 
treatment  of  their  nationals;  and,  secondly,  the  recognition  of 
certain  rights  over  the  former  German  concessions  in  China 
(Shantung). 

After  a  struggle  lasting  all  through  the  conference,  Japan 
had  finally  lost  out  in  the  meeting  of  the  League  of  Nations 
Commission  on  April  11,  in  her  first  great  contention.  She  was 
refused  the  recognition  of  racial  or  even  national  equality,  which 
she  demanded,  although  a  majority  of  the  nations  represented  on 
the  League  of  Nations  Commission  agreed  with  her  that  her 
desire  for  such  recognition  was  just  and  should  find  a  place 
in  the  covenant. 

Few  people  realise  how  sharply  the  Japanese  felt  this  hurt 
to  their  pride;  and  a  few  people  realise  the  meaning  of  this 
struggle,  as  a  forerunner  of  one  of  the  great  coming  struggles 
of  civilisation — the  race  struggle.  .  .  . 

Having  lost  out  in  their  first  great  contention  the  Japanese 
came  to  the  settlement  of  their  second  demand  with  a  feeling 
of  irritation  but  with  added  determination.  The  Japanese 
delegates  were  the  least  expressive  of  any  at  the  conference; 
they  said  the  least ;  but  they  were  the  firmest  of  any  in  hewing 
to  the  line  of  their  interests  and  their  agreements.  It  must 
not  be  forgotten  also,  in  all  fairness,  that  the  Japanese  delegates, 
not  less  than  the  British,  French  and  American,  had  their  own 
domestic  political  problems  and  opposition,  and  that  there  were 
a  powerful  demand  on  Japan  that,  while  all  the  other  nations 
were  securing  some  return  for  their  losses  and  sacrifices  in  the 
war,  Japan  should  also  get  some  return. 

At  the  same  time  Japan  was  in  a  stronger  position  than  any 
other  of  the  Allied  and  Associated  Powers,  except  the  United 
States.  She  had  been  little  hurt,  and  much  strengthened  by 
the  war.  She  was  far  distant  from  danger;  she  did  not  need 
the  League  of  Nations  as  much  as  did  the  countries  of  Europe ; 
and  more  than  anything  else,  she  occupied  a  strong  legal  status, 
for  her  claims  were  supported  by  treaties  both  with  China  and 
the  Allies;  and  she  was  moreover,  in  a  position,  if  she  were 
rendered  desperate  to  take  by  force  what  she  considered  to  be 
her  rights  if  the  Allies  refused  to  accord  them. 

At  the  dark  moment  of  the  war,  the  Spring  of  1917,  the 
British  and  French,  in  order  to  sharpen  Japanese  support  of 
the  allied  cause,  made  private  agreements  to  sustain  the  claims 


AT  THE  VERSAILLES  PEACE  CONFERENCE     141 

of  Japan  at  the  Peace  Conference  to  German  rights  in  Shan- 
tung. It  thus  happened,  in  the  Council  of  Three,  for  Orlando 
had  then  gone  home,  that  two  of  the  powers,  Great  Britain  and 
France,  were  bound  by  their  pledged  word  to  Japan.  Indeed, 
the  British  argued  that  they  felt  themselves  indebted  to  the 
Japanese  not  only  as  a  long  friendly  Ally  but  for  helping  to  keep 
the  Pacific  free  of  the  enemy  while  Australian  troops  were  being 
transported  to  Europe  and  thus  relieving  a  great  burden  for  the 
British  fleet.  It  must  not  be  forgotten  that  China  was  also 
bound  by  the  treaty  and  notes  of  1915  and  the  notes  of  1918  with 
Japan — although  China  vigorously  asserted  that  all  of  these 
agreements  were  entered  into  upon  her  part  under  coercion  by 
Japan.  In  fact,  none  of  the  Chinese  Delegates  at  Paris  had 
actually  signed  one  of  the  agreements  which  he  was  now  asking 
the  conference  to  overthrow. 

It  was  not  only  this  wire  entanglement  of  treaties  which 
Mr.  Wilson  found  in  his  advance,  but  it  must  be  said,  in  all 
frankness,  that,  in  opposing  Japan's  demands  for  economic 
privileges  and  a  " sphere  of  influence"  in  China,  he  was  also 
opposing  a  principle  which  every  other  strong  nation  at  the 
conference  believed  in  and  acted  upon,  if  not  in  China,  then 
elsewhere  in  the  world.  Japan  asserted  that  she  was  only  asking 
for  the  rights  already  conceded  to  other  nations.  Japan  was 
thus  in  a  very  strong  position  in  insisting  upon  her  claims,  and 
China  in  a  very  weak  position. 

In  this  crisis  Mr.  Wilson  was  face  to  face  with  difficult 
alternatives.  If  he  stood  stiffly  for  immediate  justice  to  China, 
he  would  have  to  force  Great  Britain  and  France  to  break 
their  pledged  word  with  Japan.  Even  if  he  succeeded  in  doing 
this,  he  still  would  have  had  to  face  the  probability,  practically 
the  certainty,  that  Japan  would  withdraw  from  the  conference 
and  go  home.  This  would  not  only  keep  Japan  out  of  the  league, 
but  it  would  go  far  toward  eventually  disrupting  the  Peace  Con- 
ference, already  shaken  by  the  withdrawal  of  Italy  and  the 
dangerous  defection  of  Belgium.  Such  a  weakening  of  the 
Peace  Conference  and  of  the  alliance  of  the  Great  Powers 
would  have  the  immediate  effect  of  encouraging  the  Germans 
not  to  sign  the  treaty  and  of  holding  off  in  the  hope  that  the 
forces  of  industrial  unrest  then  spreading  all  over  Europe 
might  overwhelm  France  or  Italy.  It  would  also  have  a  highly 
irritating  effect  upon  all  the  Bolshevist  elements  in  Europe — 
increasing  uncertainty  and  the  spread  of  anarchical  conditions. 


142  THE  SHANTUNG  QUESTION 

With  Japan  out  of  the  association  of  western  nations  there  was 
also  the  possibility,  voiced  just  at  this  time  in  both  French  and 
British  newspapers,  that  she  would  begin  building  up  alliances 
of  her  own  in  the  East — possibly  with  Germany  and  Russia. 
Indeed,  if  the  truth  were  told,  this  was  probably  the  most 
important  consideration  of  all  in  shaping  the  final  decision.  It 
was  the  plain  issue  between  the  recrudescence,  in  a  new  and 
more  dangerous  form,  of  the  old  system  of  military  alliances  and 
balances  of  power,  and  the  new  system  of  world  organisation 
in  a  League  of  Nations.  It  was  the  militaristic  Prussian  idea 
against  the  American  Wilsonian  idea. 

No  statesman  probably  ever  had  a  more  difficult  problem 
presented  to  him  than  did  Mr.  Wilson  upon  the  momentous 
29th  of  April,  1919.  At  that  moment  three  things  seemed  of 
extreme  importance  if  anything  was  to  be  saved  out  of  the 
wreckage  of  the  world.  The  first  was  a  speedy  peace,  so  that 
men  everywhere  might  return  to  the  work  of  production  and 
reconstruction  and  the  avenues  of  trade  everywhere  be 
opened.  Peace  and  work!  The  second  was  of  supreme  impor- 
tance— keeping  the  great  Allies  firmly  welded  together  to 
steady  a  world  which  was  threatened  with  anarchy.  It  was 
absolutely  necessary  to  keep  a  going  concern  in  the  world.  The 
third  was  to  perpetuate  this  world  organisation  in  a  league  of 
nations;  this  the  most  important  of  all,  for  it  had  reference  to 
the  avalanche  of  new  problems  which  were  just  ahead. 

If  the  Conference  were  broken  up,  or  even  if  Italy  remained 
out,  and  Japan  went  out,  these  things  would  be  impossible.  On 
the  other  hand,  if  the  Allies  could  be  kept  firmly  together,  peace 
established  and  a  League  of  Nations  brought  into  being  there 
was  a  chance  of  going  forward  with  world  reconstruction  on 
the  broadest  lines,  and  of  the  full  realisation  of  the  principles 
of  justice  laid  down  in  the  Armistice  terms  and  accepted  by  all 
nations.  The  treaty,  after  all,  is  no  final  settlement;  it  is  only 
one  step  in  the  great  process  of  world  reconstruction. 

It  was  with  all  these  considerations  in  view  that  the  Shantung 
settlement  was  made  by  the  Council  of  Three  sitting  in  the 
President 's  house  in  the  Place  des  Etats  Unis — with  the  Japanese 
in  full  agreement. 

It  should  be  noted  that  the  suggestion  that  Japan 
would  withdraw  from  the  Conference  and  keep  her- 
self out  of  the  League  of  Nations  was  not  generally 


AT  THE  VERSAILLES  PEACE  CONFERENCE     143 

accepted.  This  might  be  the  belief  of  President 
Wilson,  but  it  was  not  shared  even  by  his  fellow  com- 
missioners to  negotiate  peace.  On  the  other  hand,  it 
was  generally  held  that  Japan  raised  the  issue  of 
racial  equality  as  a  point  for  diplomatic  bargaining, 
the  surrender  of  which  could  easily  be  made  a  quid 
pro  quo  for  satisfaction  in  her  Shantung  claims.  Mr. 
Robert  Lansing,  former  Secretary  of  State  of  the 
United  States  and  one  of  the  American  Commis- 
sioners to  negotiate  peace  with  Germany,  believed 
that  Japan  would  not  carry  out  her  threat  to  refuse 
to  accept  the  Treaty  and  enter  the  League  of  Nations. 
"I  did  not  believe  at  the  time,  and  I  do  not  believe 
now,  that  Japan  would  have  made  good  her  threat. 
The  superior  international  position,  which  she  held  as 
one  of  the  Five  Great  Powers  in  the  Conference,  and 
which  she  would  hold  in  the  League  of  Nations  as 
one  of  the  Principal  Powers  in  the  constitution  of  the 
Executive  Council,  would  never  have  been  abandoned 
by  the  Tokio  Government.  The  Japanese  delegates 
would  not  have  run  the  risk  of  losing  this  position  by 
adopting  the  course  pursued  by  the  Italians."  * 

The  case  was  carefully  made  out  by  Mr.  R.  S. 
Baker  to  show  that  President  Wilson  yielded  to  the 
Shantung  decision  under  overwhelming  circum- 
stances, which  permitted  him  no  choice.  As  a  matter 
of  fact,  it  was  President  Wilson  himself  who  was 
responsible  for  this  decision.  Mr.  Lansing  is  again 
our  authority.  While  denying  any  knowledge  about 
the  attitude  of  the  British  and  French  statesmen  con- 
cerning the  disposition  of  the  Shantung  rights,  Mr. 
Lansing  admitted  that  he  did  know  that  "the  actual 

*  The  Peace  Negotiations,  A  Personal  Narrative,  p.  245. 


144  THE  SHANTUNG  QUESTION 

decision  lay  with  the  President."  "If  he  had 
declined  to  recognise  the  Japanese  claims,"  Mr. 
Lansing  said,  "they  would  never  have  been  granted 
nor  would  the  grant  have  been  written  into  the 
Treaty.  Everything  goes  to  show  that  he  realised 
this  responsibility  and  that  the  cession  to  Japan  was 
not  made  through  error  or  misconception  of  the 
rights  of  the  parties,  but  was  done  deliberately  and 
with  a  full  appreciation  that  China  was  being  denied 
that  which  in  other  circumstances  would  have  been 
awarded  to  her."  * 

NOTE  II 

There  was  one  interesting  incident  in  connection 
with  the  Shantung  question  at  the  Versailles  Peace 
Conference,  which  is  but  briefly  referred  to  in  the 
foregoing  account,  but  which  should  be  made  as 
widely  known  as  possible  in  order  to  show  in  its  true 
light  Japan's  Prussian  policy  in  China.  We  are 
referring  to  the  threat  of  war  by  the  Japanese  Min- 
ister in  Peking  if  the  Chinese  delegates  at  the 
Versailles  Peace  Conference  were  to  make  public  the 
Chino-Japanese  secret  agreements  of  1918  in  regard 
to  the  construction  of  railways  in  Shantung,  Man- 
churia, and  Mongolia. 

It  may  be  recalled  that  about  the  end  of  January, 
1919,  the  Principal  Allied  and  Associated  Powers 
were  engaged  in  lively  discussions  over  the  Shantung 
question.  Japan's  case  was  heard  on  January  27, 
and  that  of  China  on  the  following  day.  Upon  the 
suggestion  by  a  member  of  the  Council  of  Ten,  before 

*  Op.  Cit.,  p.  247. 


AT  THE  VERSAILLES  PEACE  CONFERENCE     145 

which  the  question  was  being  debated,  the  Chinese 
delegates  tentatively  offered  to  submit  all  the  secret 
agreements  or  understandings  between  China  and 
Japan,  in  order  to  enable  the  Council  to  arrive  at  a 
right  decision.  This  offer  was  made  on  January  28, 
1919,  and  on  February  2,  we  found  Mr.  Obata,  the 
Japanese  Minister  who  had  just  arrived  in  Peking, 
with  his  luggages  hardly  unpacked,  protesting  to  the 
Chinese  Foreign  Office  against  the  Chinese  delegates' 
promise  to  make  public  the  secret  understandings. 
This  hurried  protest  gave  rise  to  a  crop  of  "wild 
talks"  and  "exaggerated  reports,"  some  of  which 
went  to  the  extent  of  asserting  that  the  Japanese 
Minister  intimated  war  if  the  secret  understandings 
of  1918  were  submitted  to  the  Council  of  Ten  without 
Japan's  permission.  In  truth,  what  the  threat  or 
the  protest  amounted  to  is  this:  the  Japanese  Min- 
ister tried  to  force  the  Peking  Government  either  to 
instruct  its  delegates  at  Versailles  not  to  make  public 
the  Chino-Japanese  secret  understandings  of  1918, 
or  to  repudiate  in  advance  anything  they  might  say 
or  any  action  they  might  take  at  the  Peace  Con- 
ference on  the  subject  of  secret  agreements. 

Curious  to  say  that,  after  his  hurried  visit  to  the 
Chinese  Foreign  Office,  the  Japanese  Minister  called 
together  an  assemblage  of  foreign  correspondents  in 
Peking  and  explained  to  them  what  had  actually 
taken  place  in  the  interview.  He  explained  to  them 
that  he  had  warned  the  Chinese  Government  against 
the  disclosure  at  Paris  of  the  secret  understandings 
entered  into  between  Japan  and  China  in  the  fall  of 
1918.  He  admitted  that  this  warning  was  given  in 
accordance  with  instructions  received  from  the  Jap- 


146  THE  SHANTUNG  QUESTION 

anese  delegates  in  Paris.  No  instructions  on  the 
subject,  he  stated,  were  received  from  Tokio. 

A  contemporary  report  asserted  that,  during  the 
interview  with  the  Chinese  Foreign  Minister,  Mr. 
Obata  intimated  that  Great  Britain  was  so  disturbed 
by  strikes  and  internal  troubles  that  no  definite- 
political  or  financial  assistance  could  be  expected 
from  her.  The  United  States  was  in  no  better  posi- 
tion to  help  China,  since  by  the  Lansing-Ishii  "  agree- 
ment" she  had  recognised  Japan's  special  interests  in 
China.  On  the  other  hand,  Japan  was  near,  had  an 
army  and  navy  prepared  to  meet  any  emergency,  and 
was  in  a  position  to  assist  China  financially.  At  the 
time,  he  offered  on  behalf  of  the  Japanese  Govern- 
ment to  hand  over  the  unpaid  balance  of  the  loan  of 
20,000,000  yen  contracted  by  Premier  Tuan  Chi-jui 
for  the  organisation  of  a  model  army  for  national 
defence  (of  which  3,000,000  yen  had  already  been 
advanced),  provided  the  Chinese  delegates  were  to 
be  instructed  to  follow  Japan's  lead  at  the  Peace  Con- 
ference. If,  on  the  other  hand,  the  Chinese  delegates 
were  not  to  be  restrained  in  the  activities  in  Paris, 
Japan  would  cancel  the  loan  agreement  altogether 
and  demand  the  immediate  repayment  of  3,000,000 
yen  already  advanced. 

Somewhat  in  a  more  guarded  language,  the  sub- 
stance of  this  report  was  borne  out  by  Chen  Lu,  the 
Acting  Minister  of  Foreign  Affairs.  In  a  statement 
to  the  Peking  Leader,  he  admitted  that  Mr.  Obata 
presented  two  demands  in  his  first  call  at  the  Chinese 
Foreign  Office.  "One  demand  was  that  the  Chinese 
Government  should  instruct  its  delegates  at. Paris  not 
to  make  public  any  Chino-Japanese  secret  treaties 


AT  THE  VERSAILLES  PEACE  CONFERENCE     147 

without  the  consent  of  Japan,  while  the  other  demand 
was  that  instructions  should  be  issued  to  the  Chinese 
delegates  to  reconsider  their  unfriendly  attitude 
towards  Japan.  In  presenting  these  demands,  Mr. 
Obata  added  that  if  they  were  not  complied  with  by 
the  Chinese  Government,  Japan  would  take  such 
steps  as  she  deemed  necessary  to  protect  her 
interests." 

A  reading  of  this  authoritative  statement  is  suffi- 
cient to  explain  the  reported  threat  of  war.  In  view 
of  the  fact,  however,  that  the  incident  was  differently 
reported  at  the  time,  and  alternatively  denied  and 
asserted,  it  is  better  to  let  the  Japanese  Minister 
speak  for  himself.  The  following  formed  a  part  of 
a  statement  made  by  the  Japanese  Minister  in 
Peking  during  an  interview  with  the  representatives 
of  Reuter,  the  Associated  Press,  the  North  China 
Daily  News,  the  China  Press,  the  North  China  Star, 
and  Millar d's  Review,  on  the  morning  of  the  fourth 
of  February,  1919 : 

"I  called  at  the  Foreign  Office  simply  in  compliance  with 
telegraphic  instruction  which  I  had  received  from  the  Japanese 
peace  delegates  at  Paris,  in  the  sense  that  the  attention  of  the 
Chinese  Government  should  be  duly  called  to  the  fact  that  the 
Chinese  peace  delegates  promised  the  publication  of  certain 
secret  diplomatic  documents  which  must  not  be  made  public 
without  the  previous  consent  of  Japan.  I  have  received  no 
instructions  whatever  from  Tokio  in  this  matter,  nor  am  I  aware 
whether  the  Foreign  Office  in  Tokio  has  approached  the  Chinese 
Minister  accredited  to  Japan  regarding  the  question.  I  never 
threatened  the  Chinese  Government,  as  rumoured,  that  failing 
sure  guarantee  against  the  publication  of  the  documents  in 
question  the  Japanese  Government  would  resort  to  arms.  I  did 
not  refer,  as  alleged,  to  Britain's  internal  troubles  as  a  reason 
why  political  and  financial  assistance  could  not  be  given  China 
from  that  quarter.  It  is  also  a  false  rumour  that  I  declared 


148  THE  SHANTUNG  QUESTION 

that  financial  pressure  would  be  brought  to  bear  upon  China. 
The  Chinese  Foreign  Office  has  returned  no  reply  to  my  warning 
yet,  but  I  believe  it  has  referred  the  matter  to  the  Allied 
Legations. ' ' 

This  was  the  statement  made  by  Japan's  accredited 
Minister  in  Peking,  and  as  such  no  one  would  find  it 
necessary  to  question  its  accuracy.  Furthermore,  it 
was  corroborated  by  a  statement,  presumably  from 
the  Japanese  Foreign  Office,  to  the  effect  that  Mr. 
Obata  had  called  the  attention  of  the  Chinese  Govern- 
ment to  the  proposed  publication  by  the  Chinese 
delegates  at  Paris  of  the  Chino- Japanese  agreements 
of  1918  without  the  previous  consent  of  Japan,  but 
differing  in  one  important  respect  that  it  was  the 
Japanese  Foreign  Office  at  Tokio,  not  the  Japanese 
peace  delegation  at  Paris,  as  asserted  by  Mr.  Obata, 
which  had  instructed  him  to  take  this  step.  This 
apparent  discrepancy  would  have  passed  by  without 
much  notice  and  the  whole  incident  might  have  been 
easily  forgotten  had  it  not  been  for  the  fact  that  a 
cocksure  and  most  absurd  statement  was  issued  by 
the  Japanese  peace  delegation  at  Paris,  which,  not 
only  admitted  nothing  and  denied  everything,  but 
also  contradicted  in  the  strongest  language  both  the 
statement  by  the  Japanese  Foreign  Office  and  that  by 
the  Japanese  Minister  in  Peking.  As  one  of  the 
representatives  to  the  Peace  Conference,  Viscount 
Chinda,  Japanese  Ambassador  to  St.  James,  de- 
nounced the  whole  incident  as  "  absolutely  without 
foundation."  "On  February  3rd,"  he  said,  "the 
North  China  Star  and  the  Peking  and  Tientsin  Times 
published  a  report  that  the  Japanese  Minister  had 
brought  pressure  to  bear  on  China  and  insinuated 


AT  THE  VERSAILLES  PEACE  CONFERENCE     149 

that  threats  had  been  made  with  a  view  to  restraining 
the  action  of  the  Chinese  delegates  in  Paris.  There 
was  not  the  slightest  foundation  for  these  reports. 
No  pressure  was  brought  to  bear,  no  threats  were 
used,  no  secret  treaties  have  been  made,  no  bargain 
for  Shantung  Province  or  any  Chinese  territory  has 
been  advanced.  We  have  not  sought  to  control  China 
and  are  not  seeking  to  represent  China  at  the  Peace 
Conference."  It  may  be  added  in  passing  that  this 
statement  was  circulated  by  the  Kokusai  News 
Agency  under  the  date  of  February  9, 1919 : 

On  February  10,  Baron  Kijuro  Shidehara,  then 
Vice-Minister  of  Foreign  Affairs  and  now  Japanese 
Ambassador  at  Washington,  said  that  Japan  * '  simply 
called  to  China's  attention  the  established  procedure, 
according  to  which  neither  government  has  a  right 
to  publish  confidential  correspondence  without  pre- 
viously consulting  the  other." 

On  February  11,  Premier  Chin  Nun-hsun,  with  the 
approval  of  the  President  and  the  Cabinet,  instructed 
the  Chinese  delegates  at  Paris  to  disclose  to  the  Peace 
Conference  all  the  secret  agreements  with  Japan.  On 
the  following  day,  the  Japanese  delegates  at  Paris 
received  similar  instructions  from  Tokio. 

On  March  16,  after  a  lapse  of  one  month  and  half 
since  the  Chinese  delegates  first  made  their  offer  to 
the  Council  of  Ten,  the  Chino- Japanese  secret  agree- 
ments of  1918,  respecting  the  railway  concessions  in 
Shantung  and  in  Manchuria  and  Mongolia,  were  pub- 
lished simultaneously  in  Peking  and  Tokio. 


XI 

THE   SHANTUNG    " SETTLEMENT"    AND    ITS   AFTERMATH 

THE  unfortunate  decision,  ironically  called 
a  " settlement,"  reached  by  the  "Big  Three" 
at  the  Versailles  Peace  Conference,  handing 
over  the  German  rights  and  concessions  in  the  Shan- 
tung province  to  Japan  instead  of  China,  was 
received  with  a  moral  indignation,  which  was 
well-nigh  universal.  Unfavourable  comments  found 
expression  in  the  press  of  the  world,  and  voices  of 
righteous  protest  were  echoed  and  re-echoed  within 
the  four  corners  of  the  earth.  While  it  is  not  neces- 
sary to  repeat  these  words  of  reproof,  which  can  be 
consulted  in  the  files  of  the  contemporary  news- 
papers, it  may  be  highly  interesting  to  refer  to  the 
attempts  on  the  part  of  some  of  the  authors  of  the 
"settlement,"  not  only  to  defend  it  before  the  bar  of 
public  opinion,  but  also  to  make  it  palatable  to  those 
who  had  found  it  too  bitter  to  taste. 

On  May  5, 1919,  it  may  be  recalled,  Baron  Makino, 
the  senior  Japanese  delegate  at  the  Peace  Conference 
at  Versailles,  in  an  attempt  to  assuage  the  world's 
unqualified  indignation,  issued  to  the  press  in  Paris 
a  statement  in  which  he  pointed  out  that  Japan's 
policy  was  "to  return  the  Shantung  peninsula  in  full 
sovereignty  to  China,  retaining  only  the  economic 
rights  and  privileges  granted  to  Germany  and  the 

150 


AND  ITS  AFTERMATH  151 

right  to  establish  a  settlement  under  the  usual  condi- 
tions at  Tsingtao." 

The  significant  point  in  this  statement  was  that 
Japan  proposed  to  return  Shantung  to  China  "in 
full  sovereignty " — something  which  China  had  never 
lost  and  Japan  had  never  acquired. 

The  same  point  was  emphasised  again  in  the  official 
statement  given  out  on  August  2, 1919,  to  the  press  in 
Tokio,  by  Viscount  Uchida,  then  Japanese  Minister 
of  Foreign  Affairs,  which  reads  as  follows : 

VISCOUNT  UCHIDA  's  STATEMENT 

It  appears  that,  in  spite  of  the  official  statement  which  the 
Japanese  delegation  at  Paris  issued  on  May  5  last,  and  which  I 
fully  stated  in  an  interview  with  the  representatives  of  the  press 
on  May  17,  Japan's  policy  respecting  the  Shantung  question  is 
little  understood  or  appreciated  abroad. 

It  will  be  remembered  that  in  the  ultimatum  which  the  Jap- 
anese Government  addressed  to  the  German  Government  on 
August  15,  1914,  they  demanded  of  Germany  to  deliver,  on  a 
date  not  later  than  September  15,  1914,  to  the  imperial  authori- 
ties, without  condition  or  compensation,  the  entire  leased  terri- 
tory of  Kiaochow  with  a  view  to  eventual  restoration  of  the  same 
to  China.  The  terms  of  that  demand  have  never  elicited  any 
protest  on  the  part  of  China  or  any  other  Allied  or  Associated 
Powers. 

Following  the  same  line  of  policy,  Japan  now  claims  as  one 
of  the  essential  conditions  of  peace  that  the  leased  territory  of 
Kiaochow  should  be  surrendered  to  her  without  condition  or 
compensation.  At  the  same  time  abiding  faithfully  by  the 
pledge  which  she  gave  to  China  in  1915,  she  is  quite  willing  to 
restore  to  China  the  whole  territory  in  question  and  to  enter 
upon  negotiations  with  the  Government  at  Peking  as  to  the 
arrangement  necessary  to  give  effect  to  that  pledge  as  soon  as 
possible  after  the  Treaty  of  Versailles  shall  have  been  ratified 
by  Japan. 

Nor  has  she  any  intention  to  retain  or  to  claim  any  rights 
which  affect  the  territorial  sovereignty  of  China  in  the  province 
of  Shantung.  The  significance  of  the  clause  appearing  in 


152  THE  SHANTUNG  QUESTION 

Baron  Makino's  statement  of  May  5,  that  the  policy  of  Japan  is 
to  hand  back  the  Shantung  peninsula  in  full  sovereignty  to 
China,  retaining  only  the  economic  privileges  granted  to  Ger- 
many, must  be  clear  to  all. 

Upon  arrangement  being  arrived  at  between  Japan  and  China 
for  the  restitution  of  Kiaochow,  the  Japanese  troops  at  present 
guarding  that  territory  and  the  Kiaochow-Tsinan  Railway  will 
be  completely  withdrawn. 

The  Kiaochow-Tsinan  Railway  is  intended  to  be  opened  as  a 
joint  Sino- Japanese  enterprise  without  any  discrimination  in 
treatment  against  the  people  of  any  nation. 

The  Japanese  Government  have,  moreover,  under  contempla- 
tion proposals  for  the  re-establishment  in  Tsingtao  of  a  general 
foreign  settlement,  instead  of  the  exclusive  Japanese  settlement 
which  by  the  agreement  of  1915  with  China  they  are  entitled  to 
claim. 

In  answer  to  the  above  statement,  President 
Wilson  issued,  on  August  6,  the  following,  which,  he 
said,  was  made  not  with  the  idea  of  correcting  Vis- 
count Uchida,  "but  only  to  throw  a  fuller  light  of 
clarification  upon  a  situation  which  ought  to  be 
relieved  of  every  shadow  of  obscurity  or  misappre- 
hension ": 

PRESIDENT  WILSON'S  STATEMENT 

The  government  of  the  United  States  has  noted  with  the 
greatest  interest  the  frank  statement  made  by  Viscount  Uchida 
with  regard  to  Japan's  future  policy  respecting  Shantung.  The 
statement  ought  to  serve  to  remove  many  misunderstandings 
which  had  begun  to  accumulate  about  this  question. 

But  there  are  references  in  the  statement  to  an  agreement 
entered  into  between  Japan  and  China  in  1915  which  might  be 
misleading  if  not  commented  upon  in  the  light  of  what  occurred 
in  Paris  when  the  clauses  of  the  Treaty  affecting  Shantung  were 
under  discussion.  I  therefore  take  the  liberty  of  supplementing 
Viscount  Uchida 's  statement  with  the  following: 

In  the  conference  of  the  30th  of  April  last,  where  this  matter 
was  brought  to  a  conclusion  among  the  heads  of  the  principal 


AND  ITS  AFTERMATH  153 

Allied  and  Association  Powers,  the  Japanese  delegates,  Baron 
Makino  and  Viscount  Chinda,  in  reply  to  a  question  put  by 
myself,  declared  that: 

1 '  The  policy  of  Japan  is  to  hand  back  the  Shantung  peninsula 
in  full  sovereignty  to  China,  retaining  only  the  economic  privi- 
leges granted  to  Germany,  and  the  right  to  establish  a  settle- 
ment under  the  usual  conditions  at  Tsingtao. 

"The  owners  of  the  railway  will  use  special  police  only  to 
insure  security  for  traffic.  They  will  be  used  for  no  other  purpose. 

"The  police  forces  will  be  composed  of  Chinese,  and  such 
Japanese  instructors  as  the  directors  of  the  railway  may  select 
will  be  appointed  by  the  Chinese  Government." 

No  reference  was  made  to  this  policy  being  in  any  way 
dependent  upon  the  execution  of  the  agreement  of  1915  to 
which  Count  Uchida  appears  to  have  referred.  Indeed,  I  felt  it 
my  duty  to  say  that  nothing  that  I  agreed  to  must  be  con- 
strued as  an  acquiescence  on  the  part  of  the  Government  of  the 
United  States  in  the  policy  of  the  notes  exchanged  between 
China  and  Japan  in  1915  and  1918,  and  reference  was  made  in 
the  discussion  to  the  enforcement  of  the  agreements  of  1915 
and  1918  only  in  case  China  failed  to  cooperate  fully  in  carrying 
out  the  policy  outlined  in  the  statement  of  Baron  Makino  and 
Viscount  Chinda. 

I  have,  of  course,  no  doubt  that  Viscount  Uchida  had  been 
apprised  of  all  the  particulars  of  the  discussion  in  Paris,  and  I 
am  not  making  this  statement  with  the  idea  of  correcting  his, 
but  only  to  throw  a  fuller  light  of  clarification  upon  a  situation 
which  ought  to  be  relieved  of  every  shadow  of  obscurity  or 
misapprehension. 

WOODKOW  WILSON. 


Statements  similar  to  those  given  above  and  filled 
with  the  self-same  assertion  of  restoring  Shantung 
to  China  "in  full  sovereignty"  were  freely  made  at 
the  time  by  the  interested  parties  on  both  sides  of  the 
Pacific.  The  alleged  purpose  was,  of  course,  to 
explain  the  exact  nature  of  Japan's  commitment. 
But  was  the  explanation  satisfactory?  It  cannot  be 
denied  that  it  was  highly  misleading.  China  had 


154  THE  SHANTUNG  QUESTION 

never  lost  her  sovereignty  over  the  Kiaochow  Bay 
territory,  leased  to  Germany  for  ninety-nine  years. 
To  say,  therefore,  that  the  policy  of  Japan  was  to 
restore  Shantung  to  China  "in  full  sovereignty"  was 
to  assert  what  was  known  to  be  not  true. 

To  prove  the  case  we  need  but  refer  to  the  Lease 
Convention  *  of  March  6,  1898.  In  the  first  Article 
of  the  Convention,  it  was  stipulated  that  in  leasing 
the  Kiaochow  Bay  to  Germany,  His  Majesty  the 
Emperor  of  China  reserved  to  himself  "all  rights  of 
sovereignty ' ?  over  the  territory.  In  the  third  Article 
it  was  stipulated :  "In  order  to  avoid  the  possibility 
of  conflicts,  the  Imperial  Chinese  Government  will 
not  exercise  rights  of  administration  in  the  leased 
territory  during  the  term  of  the  lease,  but  grants  the 
exercise  of  the  same  to  Germany."  It  is  thus  clear 
that  what  Germany  had  enjoyed  during  her  occu- 
pancy and  what  the  Chinese  Government  had  volun- 
tarily relinquished  for  the  term  of  the  lease  of  ninety- 
nine  years,  was  the  "rights  of  administration,"  and 
not  the  rights  of  sovereignty  or  sovereignty  itself.  To 
the  students  of  International  Law,  and  to  those  who 
are  well  versed  in  the  theory  of  sovereignty,  there  is 
a  world  of  difference  between  the  two.  In  other 
words,  China  relinquished  her  "jurisdiction"  over 
the  territory  for  the  term  of  lease  of  ninety-nine 
years,  the  word  "jurisdiction"  being  generally  used 
to  designate  the  territorial  scope  within  which  a  sov- 
eign  power  may  exercise  its  administrative  authority 
and  jurisdictional  rights.  On  the  other  hand,  "sov- 
ereignty" is,  as  the  term  has  been  understood  in  its 
legal  acceptation,  "a  political  authority  without  a 

*  Vide  Appendix  A. 


AND  ITS  AFTERMATH  155 

political  superior. "  Its  distinct  attributes  are  per- 
manence, exclusiveness,  and  absoluteness,  of  which 
the  German  lease  of  Kiaochow  Bay  had  none.  "The 
jurisdiction  of  a  nation  within  its  own  territory  is 
necessarily  exclusive  and  absolute,"  said  Justice 
Marshall  in  the  famous  case  of  Schooner  vs.  Ma- 
Paddon,  in  1812.  "It  is  susceptible  of  no  limitation 
not  imposed  by  itself.  Any  restriction  upon  it, 
deriving  validity  from  an  external  source,  would 
imply  a  diminution  of  its  sovereignty  to  the  same 
extent  in  that  power  which  could  impose  such  restric- 
tion. All  exceptions,  therefore,  to  the  full  and 
complete  power  of  a  nation  within  its  own  territories 
may  be  traced  up  to  the  consent  of  the  nation  itself. 
They  can  flow  from  no  other  legitimate  source.  This 
consent  may  be  either  express  or  implied. "  In  the 
case  of  Kiaochow  Bay,  it  was  China,  the  sovereign 
power,  who  gave  this  consent,  that  Germany  was  to 
exercise  the  right  of  administration  over  the  leased 
territory  for  ninety-nine  years.  It  is,  therefore,  evi- 
dent that  China  had  never  lost  or  abandoned,  either 
permanently  or  for  the  duration  of  the  lease,  her  sov- 
ereignty over  the  territory;  Germany  had  never 
acquired  it ;  and  Japan  could  under  no  circumstances 
claim  it.  How  could  it  be  explained,  then,  that  Japan 
was  to  restore  to  China  something  which  China  had 
never  lost?  It  seemed  an  impossible  task  which 
Japan  had  undertaken. 

Now  to  go  just  one  step  further.  For  the  sake  of 
argument,  let  it  be  assumed  that  China,  in  leasing  the 
territory  to  Germany,  had  lost  her  sovereignty  over 
it,  and  that  Japan  was  now  to  restore  it  to  China  in 
full.  The  question  was  raised:  How  could  Japan 


156  THE  SHANTUNG  QUESTION 

restore  the  Shantung  peninsula  "in  full  sovereignty" 
when  she  insisted  at  the  same  time  upon  the  establish- 
ment of  an  exclusive  settlement  at  Tsingtao,  which 
could  not  be  anything  else  but  an  imperium  in 
imperio  and  which  would  be,  therefore,  a  decided 
limitation  of  China's  sovereignty  over  the  territory? 
Baron  Makino  said  that  Japan's  policy  was  to  return 
the  Shantung  peninsula  in  full  sovereignty,  retain- 
ing only  the  economic  privileges  granted  to  Germany 
and  the  right  to  establish  a  settlement  under  the  usual 
conditions  at  Tsingtao.  He  did  not  realise  that  he 
had  contradicted  himself  in  the  statement.  It  ought 
to  be  clear  to  Baron  Makino  and  to  the  others  who 
had  made  the  similar  assertion  that  a  foreign  settle- 
ment on  the  Chinese  territory,  be  it  an  international 
or  an  exclusive  Japanese  settlement,  was  a  serious 
limitation  of  China's  territorial  sovereignty. 

The  plea  of  retaining  only  economic  privileges  in 
the  Shantung  province  was  hardly  more  effective.  It 
is  almost  a  commonplace  to  say  that  the  economic 
privileges  which  a  foreign  Power  enjoys  in  China 
carry  with  them  many  rights,  which  are  political  in 
nature.  This  seems  to  be  true  not  only  in  China,  but 
also  in  all  the  rich  but  weak  countries  which  have 
been  singled  out  by  the  strong  for  exploitation. 
According  to  the  sweeping  provisions  of  the  Ver- 
sailles Treaty,  Japan  got  .everything  in  Shantung 
that  is  of  any  value.  It  was  feared  that,  with  the 
railways,  mines,  and  other  economic  weapons  in  her 
hands,  Japan  would  make  Shantung  another  South 
Manchuria.  Japan  had  nothing  at  first  in  South 
Manchuria  except  the  economic  rights  and  privileges 
— the  same  kind  of  rights  and  privileges  which  she 


AND  ITS  AFTERMATH  157 

proposed  to  have  in  Shantung.  The  belief  was  very 
generally  held  that  what  she  had  done  and  is  doing 
in  South  Manchuria  she  would  repeat  in  Shantung. 
In  South  Manchuria,  Japan  has  controlled  the  South 
Manchurian  Eailway,  and,  thus,  controlled  the  only 
means  of  transportation;  she  has  closed  the  Man- 
churian door  which  is  supposed  to  be  open  for  inter- 
national trade  and  commerce  with  equal  opportunity ; 
she  has  adopted  the  pernicious  system  of  railway 
rebates  and  preferential  tariffs,  and  thus  discrimi- 
nated foreign  trade  in  Manchuria  in  favour  of  her 
own  nationals ;  she  has  manipulated  the  Chinese  Cus- 
toms Houses  in  South  Manchuria,  in  which  a  large 
number  of  Japanese  has  been  employed  in  such  a 
manner  and  to  such  an  extent  that  the  Chinese  Cus- 
toms Service  has  been  made  a  safe  and  convenient 
channel  of  smuggling  by  Japanese  merchants  of 
opium  and  morphia  to  China ;  she  has  maintained  a 
large  number  of  troops  and  gendarmes  as  railway 
guards, — so  many  of  them  there  are  along  the  South 
Manchurian  Railway  that  an  American  tourist  has 
once  remarked  that  Manchuria  is  nothing  but  a  Jap- 
anese military  camp ;  and  aside  from  these  so-called 
economic  rights  or  privileges,  which  are  highly 
political  in  character,  as  has  been  shown,  Japan  has 
established  a  large  number  of  Japanese  police  sta- 
tions in  Manchuria,  contrary  to  the  treaty  provisions 
between  Japan  and  China,  contrary  to  the  recognised 
principles  of  International  Law,  and  violating  the 
territorial  sovereignty  of  China.  It  was  feared  that 
these  practices  would  be  repeated  in  Shantung, 
together  with  the  economic  privileges  which  she 
claimed  to  enjoy  there.  And  the  fear  seemed  to  have 


158  THE  SHANTUNG  QUESTION 

been  well  founded  in  view  of  what  Japan  has  been 
doing  for  the  last  six  or  seven  years. 

Irrespective  of  the  profuse  assurance  by  Japanese 
statesmen  and  diplomats,  to  restore  Shantung  "in 
full  sovereignty"  to  China  and  to  retain  nothing  but 
economic  privileges,  the  Chinese  people  resorted  to 
the  only  weapon  which  they  knew  they  could  use  with 
good  effect.  They  started  a  nation-wide  boycott 
against  Japanese  goods,  immediately  following  upon 
the  decision  reached  at  the  Versailles  Peace  Con- 
ference on  the  Shantung  question.  They  seemed  to 
be  utterly  unappreciative  of  Japan's  good  wishes  as 
expressed  in  her  undertaking  to  restore  Shantung  to 
China  in  full  sovereignty,  to  make  the  Kiaochow- 
Tsinan  Railway  a  Chino- Japanese  joint  enterprise. 
They  resented  the  " settlement' ' ;  they  rejected  it ;  but 
having  no  means  to  repudiate  it,  they  resorted  to 
nation-wide  boycott.  Their  strong  resentment  was 
expressed,  however,  not  only  against  Japan  who  had 
forced  the  "settlement."  They  also  expressed  it,  in 
no  uncertain  fashion,  on  their  own  Government  and 
their  own  officials.  They  went  so  far  as  to  burn  the 
house  of  one  of  the  officials  and  inflict  injuries  upon 
them,  whose  previous  dealings  with  Japan  they  con- 
sidered to  be  responsible  for  the  "settlement." 
Apparently,  while  violence  was  not  their  counsel, 
they  had  no  hesitation  to  use  it  in  expressing  their 
just  indignation.  In  no  case  is  it  truer  that  one 
reaps  what  he  sows. 


XII 

THE  SHANTUNG  QUESTION  IN  THE  SENATE 

THE  history  of  the  Shantung  question  would  be 
incomplete  if  we  should  fail  to  mention  the 
extremely  important  part  which  the  United 
States  Senate  had  played  in  it. 

The  announcement  of  the  "  settlement "  on  April 
30,  1919,  in  Paris,  was  followed  by  an  immediate 
outburst  of  moral  indignation  throughout  the  world. 
In  the  United  States,  this  sentiment  was  truthfully 
reflected  in  the  press  and  in  the  Senate.  There  was 
not  a  single  newspaper  in  the  country,  which  con- 
sidered the  Shantung  award  as  a  just  one,  and  there 
was  not  a  single  Senator,  Democrat  or  Republican, 
who  did  not  wish  that  a  better  disposition  of  the 
German  rights  and  concessions  in  Shantung  could 
have  been  found  at  the  Versailles  Peace  Conference. 
Senator  Johnson  of  California  regarded  it  as  "the 
blackest  page  in  all  our  history."  Senator  Sher- 
man of  Illinois  considered  it  as  "the  superlative 
treachery  in  the  history  of  modern  times."  Senator 
Harding  of  Ohio  (now  President  of  the  United 
States)  declared  that  it  was  "an  international  im- 
morality" and  the  "rape  of  the  first  great  democracy 
of  the  Orient."  Senator  Lodge  of  Massachusetts, 
Chairman  of  the  Senate  Foreign  Relations  Commit- 
tee, said  that  the  Shantung  award  was  "a  great 
wrong,"  "an  intolerable  wrong,"  "to  man  and  to  the 

159 


160  THE  SHANTUNG  QUESTION 

cause  of  freedom  and  justice. "  Senator  Reed  of 
Missouri  declared  that  lie  knew  of  "no  similar  picture 
of  perfidy"  "in  all  the  history  of  the  world"  and 
"nothing  blacker  in  the  annals  of  treachery  and  dou- 
ble dealing  between  nations."  Senator  Norris  said 
that  the  Shantung  settlement  shocked  "the  sensibili- 
ties of  right  and  justice,"  and  Senator  Watson  of 
Indiana  considered  it  as  a  "fraud"  and  a  "cancer" 
that  vitiated  the  entire  Versailles  Treaty  of  Peace. 
Of  all  the  senatorial  utterances,  the  one  most 
typical  and  most  true  to  the  real  sentiment  of  the 
overwhelming  majority  of  the  Senators  was  that  by 
Senator  Borah  of  Idaho,  when  he  said,  in  a  speech 
before  the  Senate,  August  26,  1919 : 

"The  Shantung  affair  is  indefensible  from  any  standpoint  of 
morals  or  international  justice  or  common  decency.  It  is  one 
of  those  things  so  immoral  and  unrighteous  that  we  wish  to 
approach  it  with  deaf  ears  and  closed  eyes.  We  dread  even  to 
think  about  it.  We  loathe  to  be  forced  to  attempt  to  defend  it. 
It  will  dishonour  and  degrade  any  people  who  seek  to  uphold 
it.  War  will  inevitably  follow  as  the  result  of  an  attempt  to 
perpetuate  it.  It  is  founded  in  immorality  and  revolting  injus- 
tice. It  is  outside  the  pale  of  respectability  even  according  to 
ancient  standards.  It  shocks  the  conscience  even  of  European 
diplomacy.  Naked,  hideous,  and  revolting  it  looms  up  before 
us  as  a  monster  from  that  cruel  and  shameless  world  which  all 
had  hoped  and  prayed  was  forever  behind  us.  It  smacks  of  all 
the  iniquities  of  European  adjustments.  Indeed  perhaps  it  has 
no  parallel  when  all  its  features  are  considered." 

On  the  other  hand,  there  were  quite  a  few  Senators 
who  honestly  believed  that  Japan  could  be  relied 
upon  to  keep  her  word  and  return  Shantung  rights 
to  China,  trusting  to  the  League  of  Nations  for  re- 
adjustment. There  were  others  who,  out  of  their 
party  loyalty,  justified  or  attempted  to  justify  the 


IN  THE  UNITED  STATES  SENATE  161 

Shantung  settlement  on  the  ground  that  it  was  the 
best  settlement  obtainable  under  the  existing  circum- 
stances then. 

It  has  often  been  said  that  it  was  not  due  to  love 
for  China,  but  to  hatred  of  President  Wilson,  that 
the  Republican  Senators  seized  upon  the  Shantung 
question  to  defeat  the  Versailles  Treaty.  It  must 
also  be  said  that  the  vigorous  opposition  by  the  Re- 
publican majority  to  the  Shantung  award  could  not 
and  should  not  be  dismissed  either  as  mere  senti- 
mentality or  as  partisan  politics.  With  the  American 
people,  as  with  most  of  the  Senators,  it  was  a  simple 
question  of 'fact  and  justice.  It  could  not  be  said 
that  most  Americans  were  anti-Japanese  or  pro- 
Chinese,  anti- Wilson  or  pro-Lodge,  but  it  could  be 
safely  assumed  that  they  believed  that  the  Shantung 
decision  was  a  rank  injustice  to  China,  to  which  the 
United  States  must  not  be  a  consenting  party,  and 
for  which  the  United  States,  as  a  traditional  friend 
of  China,  should  endeavour  to  bring  about  an  early 
redress. 

Now  leaving  aside  the  torrent  of  senatorial  elo- 
quence upon  the  Shantung  question,  we  come  to  the 
different  attempts  or  steps  which  the  Senate  made, 
either  to  express  its  distinct  disapproval  of  the  Shan- 
tung settlement  or  to  suggest  means  of  remedy  and 
redress.  In  their  eager  search  for  information,  the 
members  of  the  Senate  Committee  on  Foreign  Rela- 
tions held,  on  August  19,  1919,  a  conference  at  the 
White  House,  with  President  Wilson,  seeking  to  be 
authoritatively  and  correctly  informed  as  to  the  ex- 
act understanding  about  the  return  of  Shantung  to 
China.  The  Senate  Committee  on  Foreign  Relations 


162  THE  SHANTUNG  QUESTION 

also  called  before  it,  August  9,  20,  and  22,  1919,  Mr. 
Thomas  F.  Millard,  Dr.  John  C.  Ferguson,  and  Pro- 
fessor E.  T.  Williams  to  give  their  opinions  on  the 
Shantung  settlement.  Even  Secretary  Lansing,  one 
of  the  American  Commissioners  to  negotiate  peace 
at  Paris,  was  called  before  the  Committee  to  testify, 
first  on  August  6,  and  then  on  August  11,  1919. 

On  July  10,  1919,  Senator  Borah  submitted  the 
following  resolution  (Senate  Eesolution  No.  116), 
which  was  referred  to  the  Committee  on  Foreign 
Relations: 

"Resolved,  That  the  President  be  requested,  if  not  incom- 
patible with  the  public  interest,  to  send  to  the  Senate  a  copy 
of  any  letter  or  written  protest  by  any  member  or  members  of 
the  American  Peace  Commission  against  the  disposition  or 
adjustment  which  was  made  with  reference  to  Shantung,  and 
particularly  a  copy  of  a  letter  written  by  General  Tasker  H. 
Bliss,  member  of  the  Peace  Commission,  on  behalf  of  himself; 
Robert  Lansing,  Secretary  of  State;  and  Hon.  Henry  White, 
members  of  the  Peace  Commission,  protesting  against  the  pro- 
visions of  the  treaty  with  reference  to  Shantung. 

"2.  Any  memoranda  or  other  information  in  the  possession 
of  the  American  Peace  Commission  or  any  member  thereof,  with 
reference  to  the  attempt  of  Japan  or  her  peace  delegates  to  intimi- 
date the  Chinese  peace  delegates  and  to  control  the  action  of 
the  said  Chinese  delegates  through  and  by  means  of  intimida- 
tion. " 

The  Committee  on  Foreign  Relations,  to  which  this 
resolution  was  referred,  reported  it  back  to  the 
Senate  favourably  on  July  15,  1919.  It  was,  how- 
ever, amended  by  inserting  "or  of  any  officials 
attached  thereto"  after  "letter  or  written  protest  by 
any  member  or  members  of  the  American  Peace  Com- 
mission. "  Thus  amended,  the  resolution  was  agreed 
to  by  the  Senate,  July  17.  In  due  course,  it  was  sent 


IN  THE  UNITED  STATES  SENATE  163 

to  the  President.  But  President  Wilson  refused 
either  to  disclose  the  letter  by  General  Tasker  H. 
Bliss  or  to  admit  that  he  had  any  knowledge  of  the 
fact  that  the  Japanese  delegates  to  the  Versailles 
Peace  Conference  sought  to  influence  the  Chinese 
delegates  through  means  of  intimidation.  The  latter 
it  was  obviously  improper  for  the  President  to  admit, 
and  the  former  he  refused  to  disclose  on  the  ground 
that  it  contained  criticisms  about  other  Powers  which 
it  was  quite  proper  for  one  Peace  Commissioner  to 
make  in  a  confidential  communication  to  another,  but 
which  he  considered  inexpedient  to  make  public.* 

In  an  effort  to  put  the  Senate  on  record  as  disap- 
proving the  Shantung  settlement,  Senator  Spencer 
of  Missouri  offered,  on  July  17,  1919,  this  resolution 
(Senate  Resolution  No.  125)  : 

"Resolved,  That  the  Senate  expresses  its  deep  regret  at  the 
provisions  of  the  Treaty  (Sections  156,  157,  and  158),  which 
transfer  to  Japan  such  broad  rights  and  powers  and  physical 
possession  over  the  territory  and  people  in  the  Shantung  penin- 
sula of  China,  as  being  alike  disregardful  of  the  true  rights  and 
deep-seated  desires  of  more  than  36,000,000  of  Chinese  inhabit- 
ing the  peninsula,  unjust  to  the  Republic  of  China,  and  threaten- 
ing to  the  future  peace  of  the  world. 

*In  his  letter  to  the  Senate,  August  11,  1919,  President  Wilson  said: 
"In  reply  to  this  request,  let  me  say  that  General  Bliss  did  write  me  a 
letter  in  which  he  took  very  strong  grounds  against  the  proposed  Shantung 
settlement,  and  that  his  objections  were  concurred  in  by  the  Secretary  of 
State  and  Mr.  Henry  White.  But  the  letter  cannot  be  properly  described 
as  a  protest  against  the  final  Shantung  decision,  because  it  was  written 
before  that  decision  had  been  arrived  at,  and  in  response  to  my  request 
that  my  colleagues  on  the  Commission  apprise  me  of  their  judgment  in  the 
matter.  The  final  decision  was  very  materially  qualified  by  the  policy  which 
Japan  undertook  to  pursue  with  regard  to  the  return  of  the  Shantung 
peninsula  in  full  sovereignty  to  China.  I  would  have  no  hesitation  in 
sending  the  Senate  a  copy  of  General  Bliss's  letter,  were  it  not  for  the  fact 
that  it  contains  references  to  other  Governments,  which  it  was  perfectly 
proper  for  General  Bliss  to  make  in  a  confidential  communication  to  me, 
but  which  I  am  sure  General  Bliss  would  not  wish  to  have  repeated  outside 
our  personal  and  intimate  exchange  of  views." 


164  THE  SHANTUNG  QUESTION 

"It  is  the  sincere  hope  of  the  United  States  that  this  manifest 
injustice  may  be  speedily  reconsidered  and  remedied. ' ' 

The  resolution  was  referred  to  the  Committee  on 
Foreign  Eelations  without  debate.  It  represented 
one  of  the  early  attempts  on  the  part  of  the  United 
States  Senate  to  express  its  disapproval  of  the  Shan- 
tung settlement.  It  should  be  noted  that  this  resolu- 
tion was  offered  to  voice  the  sentiment  of  the  United 
States  Senate,  and  not  intended  by  its  sponsor  to  con- 
nect it  with  the  ratification  of  the  Versailles  Treaty. 

On  July  15,  1919,  Senator  Poindexter  submitted 
the  following  resolution  (Senate  Resolution  No.  122), 
which  was  referred  to  the  Committee  on  Foreign 
Relations  and  was  rejected: 

"Resolved,  That  the  Senate  does  not  advise  and  does  not 
consent  to  that  article  of  the  pending  proposed  treaty  with 
Germany,  China,  Japan  and  other  nations  by  which  Shantung, 
a  part  of  China,  is  transferred  to  the  jurisdiction  of  Japan. ' ' 

On  August  20,  1919,  Senator  Owen  of  Oklahoma 
submitted  the  following  resolution  (Senate  Resolu- 
tion No.  169),  which  was  referred  to  the  Committee 
on  Foreign  Relations  and  was  also  voted  down : 

"The  Senate  has  ratified  the  treaty  upon  the  express  under- 
standing that  the  Japanese  Government  will  fully  and  speedily 
carry  out  the  pledge  made  to  the  Chinese  Government  in  May, 
1915,  with  regard  to  the  Shantung  peninsula  and  has  every 
confidence  of  the  faithful  and  early  compliance  with  this 
pledge. " 

It  may  be  frankly  stated  that  Senator  Owen  did 
not  appear  to  be  sincere  in  his  purpose  nor  the  resolu- 
tion he  proposed  seem  to  be  an  adequate  remedy  for 


IN  THE  UNITED  STATES  SENATE  165 

the  injustice  of  the  Shantung  settlement.  Was  Sen- 
ator Owen  mindful  of  the  fact  that  Japan  had  made 
no  "pledge"  to  China  in  May,  1915,  with  regard  to 
the  Shantung  province?  There  was  an  agreement 
forced  upon  China  in  May,  1915,  for  the  eventual 
settlement  of  the  Shantung  question,  the  terms  of 
which  China  sought  to  repudiate.  They  were  based 
upon  the  notorious  Twenty-one  Demands,  as  we  have 
shown  in  a  previous  chapter,  against  which  the 
United  States  herself  had  protested.  To  say  that  the 
Senate  ratified  the  Versailles  Treaty  with  the  express 
understanding  that  Japan  would  "speedily  carry  out 
the  pledge  made  to  the  Chinese  Government  in  May, 
1915,"  would  be  tantamount  to  encouraging  Japan  to 
insist  upon  the  enforcement  of  the  Twenty-one 
Demands  and  lending  her  the  moral  sanction  of  the 
United  States  Senate.  Besides,  it  seemed  highly 
questionable  if  Senator  Owen  had  really  "every  confi- 
dence" in  Japan  in  the  execution  of  her  international 
pledges.  The  very  fact  that  he  introduced  the  above 
resolution  indicated  his  lack  of  it. 

On  August  23,  1919,  the  Committee  on  Foreign 
Relations  by  a  majority  of  one  voted  an  amendment 
to  Articles  156,  157,  and  158  of  the  Treaty  of  Peace 
with  Germany,  substituting  the  name  "China"  for 
the  name  "Japan"  so  that  all  the  German  leasehold 
rights  in  Shantung  and  all  German  concessions  and 
rights  in  Kiaochow  Bay,  which  Germany  was  made 
to  renounce  in  favour  of  Japan  by  the  said  Treaty  of 
Peace,  would  by  this  amendment  be  transferred  to 
China  instead  of  Japan. 

This  amendment  constituted  a  radical  reversal  of 
the  terms  of  the  Treaty  of  Peace,  and  if  passed  by  the 


166  THE  SHANTUNG  QUESTION 

Senate,  it  would  have  placed  the  United  States  in  the 
most  embarrassing  situation  wherein  she  would  find 
herself  utterly  unable  to  compel  its  acceptance  by 
Japan  or  by  the  other  signatory  Powers.  If  the 
Senate  had  been  sufficiently  far-sighted  and  passed, 
before  the  signing  of  the  Versailles  Treaty  of  Peace 
with  Germany,  a  resolution  to  the  effect  that  it 
would  refuse  to  ratify  any  peace  treaty  that  handed 
German  rights  and  concessions  in  Shantung  to  Japan 
instead  of  China,  such  a  resolution  might  have 
opened  the  eyes  of  those  statesmen  responsible  for 
the  " settlement "  to  its  crass  injustice  and  prompted 
them  to  pursue  a  different  course.  To  undo  the  mis- 
chief after  it  had  been  done — for  that  was  what  the 
amendment  amounted  to — would  be  impractical,  if 
not  exactly  impossible. 

The  impractical  nature  of  the  amendment  was 
quickly  realised  by  the  Senators  responsible  for  it. 
They  immediately  changed  their  tactics.  On  Novem- 
ber 4,  1919,  Senator  Lodge  proposed  "to  strike  out 
the  Shantung  articles,  instead  of  the  previous  amend- 
ment or  series  of  amendments  from  the  Committee, 
which  proposed  to  strike  out  the  word  '  Japan'  and 
insert  the  word  '  China '."  A  vote  was  taken  on  the 
amendment,  or  proposal,  and  it  was  rejected  by  41  to 
26,  with  29  Senators  not  voting. 

The  rejection  of  the  proposal,  which  was,  in  effect, 
nothing  short  of  a  textual  amendment  of  the 
Versailles  Treaty  of  Peace  with  Germany  was 
clearly  foreseen.  Senator  Lodge,  as  Chairman  of 
the  Committee  on  Foreign  Relations,  had  introduced 
this  amendment  perhaps  as  a  test  of  his  strength. 
It  is  reasonable  to  suppose  that  he  must  be  well  aware 


IN  THE  UNITED  STATES  SENATE  167 

that  leaving  out  the  Shantung  provisions  from  the 
Versailles  Treaty  was  by  no  means  meeting  the  issue. 
It  would  seem  that  the  United  States  sought  to  dodge 
it.  Perhaps  Senator  Lodge  was  merely  exercising 
his  parliamentary  tactics  by  presenting  the  drastic 
amendments  first,  so  as  to  prepare  the  senatorial  state 
of  mind  for  more  moderate  reservations  which  he 
really  meant  to  offer. 

That  this  was  the  case  was  confirmed  by  the  events 
in  the  days  to  come.  With  the  rejection  of  the  pro- 
posal to  strike  out  the  Shantung  clauses  from  the 
Treaty,  Senator  Lodge  proposed,  after  much  deliber- 
ation and  manoeuvring,  the  following  reservation,  to 
be  made  a  part  of  the  resolution  of  ratification  of  the 
Treaty  of  Peace  with  Germany : 

"The  United  States  withholds  its  assent  to  Articles  156,  157 
and  158  and  reserves  full  liberty  of  action  with  respect  to  any 
controversy  which  may  arise  under  said  articles  between  the 
Republic  of  China  and  the  Empire  of  Japan." 

In  the  meantime,  Senator  McCumber  of  North 
Dakota  offered  the  following  reservation,  which  he 
intended  to  make  a  part  of  the  resolution  of  ratifica- 
tion of  the  Treaty  of  Peace : 

"That  in  advising  and  consenting  to  the  ratification  of  said 
treaty,  the  United  States  understands  that  the  German  rights 
and  interests,  renounced  by  Germany  in  favour  of  Japan  under 
the  provisions  of  Articles  156,  157,  and  158  of  said  treaty,  are 
to  be  returned  by  Japan  to  China  at  the  termination  of  the 
present  war  by  the  adoption  of  this  treaty  as  provided  in  the 
exchanged  notes  between  the  Japanese  and  Chinese  Governments 
of  date  May  25,  1915." 

That  such  a  reservation  would  be  rejected  by 
the  Senate  was  also  foreseen.  Its  futility  was  self- 


168  THE  SHANTUNG  QUESTION 

evident.  It  repeated  the  same  mistake  which  Sen- 
ator Owen  made  in  his  resolution  by  referring  to  the 
notes  exchanged  between  China  and  Japan,  May  25, 
1915.  Nothing  could  suit  Japan  better  than  a  sug- 
gestion, not  to  say  a  direct  invitation  by  the  Senate 
of  the  United  States,  to  settle  the  Shantung  question 
according  to  the  terms  of  the  notes  and  treaties  of 
May  25,  1915.  In  fact,  this  was  what  the  Japanese 
delegates  had  insisted  upon — to  fall  back  on  the  notes 
and  treaties  of  1915  as  the  final  basis  for  the  disposi- 
tion of  the  Shantung  dispute.*  Besides,  it  was 
inaccurate  to  consider  the  war  as  terminated  "by 
the  adoption  of  this  treaty."  The  adoption  by  the 
United  States  of  the  treaty  would  surely  end  the 
war  with  Germany.  But  was  the  Senator  aware  of 
the  fact  that  China  had  refused  to  sign  the  Versailles 
Treaty  of  Peace,  and  that  a  state  of  war  continued  to 
exist,  therefore,  between  China  and  Germany? 

On  November  15, 1919,  Senator  McCumber  offered 
what  he  styled  a  "compromise  reservation"  on  the 
Shantung  question,  which  he  intended  to  take  the 
place  of  the  one  offered  by  Senator  Lodge.  It  reads : 

"The  United  States  refrains  from  entering  into  any  agree- 
ment on  its  part  in  reference  to  the  matters  contained  in  Articles 
156,  157,  and  158,  and  reserves  full  liberty  of  action  in  respect 
to  any  controversy  which  may  arise  in  relation  thereto. " 

Senator  Smith  of  Georgia  also  sought  to  amend  the 
Lodge  reservation  by  striking  out  the  words,  "with- 
holds its  assent  to  Articles  156,  157,  and  158." 

On  the  same  day,  Senator  Jones  of  Washington 
proposed  that,  at  the  end  of  two  years  from  the  date 
of  the  exchange  of  the  ratifications  of  the  Versailles 

*  Vide  Chapter  X  and  Appendix  L. 


IN  THE  UNITED  STATES  SENATE  169 

Treaty,  China's  sovereignty  over  the  Shantung 
province  should  be  fully  and  completely  restored 
to  her. 

Senator  Pittman  of  Nevada  proposed,  as  a  substi- 
tute for  the  Lodge  reservation,  the  following : 

"Provided,  That  in  advising  and  consenting  to  the  ratification 
of  said  treaty  the  United  States  understands  that  the  German 
rights  and  interests,  renounced  by  Germany  in  favour  of  Japan 
under  the  provisions  of  Articles  156,  157,  and  158  of  said  treaty, 
are  to  be  returned  by  Japan  to  China  at  the  termination  of  the 
present  war  by  the  adoption  of  this  treaty  as  provided  in  the 
exchanged  notes  between  the  Japanese  and  Chinese  Govern- 
ments of  date,  May  25,  1915. " 

It  should  be  noted  that  this  reservation  bore  a 
strong  family  resemblance,  not  only  in  purpose  but 
also  in  language,  to  the  one  submitted  by  Senator 
McCumber.  It  was  justly  rejected  by  50  to  39,  with 
six  senators  not  voting. 

The  final  reservation  on  the  Shantung  settlement 
took  the  following  shape,  leaving  out  the  last  phrase 
"  between  the  Republic  of  China  and  the  Empire  of 
Japan":  "The  United  States  withholds  its  assent 
to  Articles  156,  157  and  158  and  reserves  full  liberty 
of  action  with  respect  to  any  controversy  which  may 
arise  under  said  articles."  The  omission  of  the  last 
phrase  from  the  original  draft  was,  it  was  alleged  at 
the  time,  due  to  the  desire  to  avoid  anything  that 
would  reflect  upon  the  good  faith  of  the  Japanese 
Government. 

The  Shantung  reservation  as  thus  amended  was 
included,  together  with  other  reservations,  in  the 
resolution  of  ratification  of  the  Versailles  Treaty. 
They  were  made  a  part  and  condition  of  the  ratifica- 


170  THE  SHANTUNG  QUESTION 

tion,  which  was  "not  to  take  effect  or  bind  the  United 
States  until  the  said  reservations  and  understandings 
adopted  by  the  Senate  have  been  accepted  by  an 
exchange  of  notes  as  a  part  and  a  condition  of  this 
resolution  of  ratification  by  at  least  three  of  the  four 
principal  Allied  and  Associated  Powers,  to  wit,  Great 
Britain,  Prance,  Italy  and  Japan." 

The  resolution  was  rejected  by  the  Senate,  with  the 
result  that  the  Treaty  of  Peace  with  Germany  was 
never  ratified  by  the  United  States  Senate. 

But  the  Senate  had  not  yet  heard  the  last  of  the 
Shantung  question.  In  the  midst  of  direct  negotia- 
tion between  the  Chinese  and  Japanese  delegates  at 
the  Washington  Conference,  Senator  Walsh  of  Mon- 
tana introduced,  on  January  20,  1922,  a  resolution, 
reciting  the  history  of  the  question  and  calling  upon 
President  Harding  for  information  as  to  the  prog- 
ress of  the  Chino-Japanese  negotiations.*  The 
submission  of  this  resolution  caused  a  renewal  of 
lively  discussion  of  the  subject.  The  resolution  was 
"ordered  to  lie  over  under  the  rule"  of  the  Senate, 
and  it  was  not  taken  up  again.  Senator  Underwood 
said  in  the  debate: 

"I  wish  to  say  that  under  the  Administration  of  Mr.  Wilson 
and  under  the  Administration  of  President  Harding  our 
country  has  occupied  a  position  in  reference  to  Shantung  that 
cannot  be  controverted.  We  have  contended  from  the  beginning 
that  this  territory  of  a  right  was  the  territory  of  China  and 
have  offered  our  good  offices  on  all  occasions  to  try  to  secure  the 
return  of  that  territory  to  China. 

"The  attitude  of  the  American  delegation  at  the  conference 
now  being  held  in  Washington  has  been  exactly  the  same  as  the 
representations  made  by  the  Government  of  President  Wilson 

*  For  te*xt  of  the  resolution,  vide  Appendix  O. 


IN  THE  UNITED  STATES  SENATE  171 

and  the  Government  of  President  Harding.  The  question  has 
not  been  directly  before  the  Conference  and  manifestly  it  cannot 
come  before  the  Conference  until  it  is  settled  between  the  Govern- 
ments of  China  and  Japan,  because  seven  of  the  powers  sitting  in 
the  Conference  are  signatory  to  the  Treaty  of  Versailles  and, 
of  course,  cannot  deny  the  conclusions  reached  in  that  treaty 
with  reference  to  this  territory  until  an  agreement  is  reached 
between  China  and  Japan.  Therefore,  seven  of  the  powers  are 
unable  to  discuss  the  question  as  between  Japan  and  China 
because  they  have  already  committed  themselves  by  treaty. 

"It  cannot  be  taken  up  directly  in  the  conference,  but  for 
many  weeks  the  matter  has  been  pending  between  the  Govern- 
ment of  China  and  Japan  in  a  conference  of  their  delegates  in 
Washington,  and  although  the  American  Government  is  not 
directly  concerned  and  cannot  be  directly  concerned  in  that 
conference,  the  good  offices  of  our  Government  and  the  earnest 
desire  of  the  American  delegates  to  the  Conference  have  been 
constantly  in  favour  of  working  out  an  agreement  by  which  the 
sovereignty  of  Shantung  and  the  territorial  integrity  of  Shan- 
tung shall  be  returned  to  the  Republic  of  China. ' ' 

It  should  be  pointed  out  that  The  Netherlands  was 
not  a  signatory  Power  to  the  Versailles  Treaty.  It 
is  six,  therefore,  and  not  seven,  out  of  the  nine  Powers 
attending  the  Washington  Conference  who  were 
bound  by  the  Versailles  settlement.  Still,  the  ques- 
tion raised  by  Senator  Johnson  of  California 
remained  unanswered:  If  Shantung  was  barred 
from  consideration  because  of  the  Treaty  of  Ver- 
sailles, why  the  Pacific  Islands,  covered  by  the  same 
treaty,  were  not  also  barred  from  consideration  by 
the  Washington  Conference? 


XIII 

THE  RAILWAYS  IN  SHANTUNG 

OF  all  the  questions  that  enter  into  considera- 
tion regarding  the  Shantung  settlement,  the 
most  serious  is  admittedly  the  acquisition  by 
Japan  of  the  Chinese-German  railways  in  the  prov- 
ince and  of  the  right  to  construct  more  lines  as 
outlined  in  the  notes  exchanged  between  the  Chinese 
Minister  to  Japan  and  the  Japanese  Minister  of  For- 
eign Affairs,  September  24,  1918.  The  question 
naturally  falls  under  two  heads:  the  lines  already 
constructed  and  operated  and  the  lines  projected  or 
merely  agreed  upon.  To  the  former  class  belong 
the  Shantung  Railway,  generally  called  Kiaochow- 
Tsinan  Railway  (or  merely  Kiao-Tsi  Railway),  and 
its  branch  lines,  while  to  the  latter  belong  the  two 
projected  lines,  one  from  Tsinanfu  to  Shuntehfu  and 
the  other  from  Koami  to  Hsuchowfu  as  planned  in 
the  notes  referred  to  in  the  above. 

The  Shantung  Railway,  or  the  Kiao-Tsi  Railway, 
as  the  Chinese  have  called  it,  is  the  general  name  for 
the  lines  which  were  operated  in  Shantung  under 
German  management  before  the  war,  and  which  have 
fallen  into  Japanese  hands  since  September,  1914. 
The  forcible  seizure  of  the  Shantung  Railway  was 
made  by  Japan  under  the  pretext  of  military  neces- 
sity, as  has  been  shown  in  a  previous  chapter.  The 
line  traverses  the  province  of  Shantung,  a  large  por- 

172 


THE  RAILWAYS  IN  SHANTUNG  173 

tion  of  which  was  neutral  territory  during  the 
Japanese  attack  upon  Tsingtao,  and  its  northern 
terminus  at  Tsinanf  u  is  more  than  two  hundred  miles 
away  from  the  German  leased  territory,  which  was 
the  scene  of  military  operation.  In  distinct  violation 
of  the  specific  provisions  in  the  Hague  Convention 
of  1907  in  regard  to  neutral  territory  and  neutral 
property,  and  in  distinct  violation  of  the  ordinary 
rules  of  International  Law  regarding  such  matters, 
Japan,  under  the  pretext  of  " military  necessity," 
seized  the  railway,  and  has  kept  it  and  policed  it  ever 
since  with  Japanese  soldiers. 

The  seizure  was  illegal  and  unwarranted.  With 
the  blessing  by  the  Versailles  Peace  Conference, 
Japan  has  not  only  justified  her  past  action,  but  also 
claimed  to  keep  by  right  what  she  had  seized  by 
might.  The  Peace  Conference  had,  as  we  have  noted, 
acted  according  to  political  expediency.  The  con- 
tention remains  nevertheless  unanswerable  that  the 
Japanese  possession  of  the  Shantung  Railway  can 
never  be  legally  confirmed  without  China's  willing 
consent.  The  Chinese  delegates  at  the  Peace  Con- 
ference refused  to  sign  the  Shantung  " settlement," 
which  is  "as  monstrous  a  proposition  as  has  ever  been 
proposed  to  civilisation. ' '  And  it  is  almost  axiomatic 
to  say  that,  so  long  as  China  has  not  recognised  the 
settlement,  Japan  has  no  more  right  to  the  railway 
or  to  the  other  concessions  in  Shantung  than  Great 
Britain  or  the  United  States  might  have  to  the  coal 
mines  in  Alsace-Lorraine  if  they  had  been  taken 
away  from  France  without  her  consent. 

It  is  to  be  recalled  that  the  construction  of  the 
Shantung  Railway  was  based  on  the  Peking  Treaty 


174  THE  SHANTUNG  QUESTION 

of  1898,  in  which  Germany  was  given  the  right  to 
construct  railways  and  develop  mines  in  the  province. 
"The  Chinese  Government  sanctions  the  construction 
by  Germany  of  two  lines  of  railway  in  Shantung. 
The  first  will  run  from  Kiaochow  and  Tsinanfu  to 
the  boundary  of  Shantung  province  via  Weihsien, 
Tsinchow,  Poshan,  Tzechwan  and  Suiping.  The  sec- 
ond line  will  connect  Kiaochow  with  Chinchow, 
whence  an  extension  will  be  constructed  to  Tsinan 
through  Laiwuhsien."  The  railway  was  laid  and 
operated  by  the  Schantung  Eisenbahn  Gesellschaft, 
or  the  Shantung  Tieh-lu-kung-sze,  which  was  estab- 
lished in  June,  1899,  as  a  Chino-German  joint  con- 
cern. "In  this  Company  both  German  and  Chinese 
subjects  shall  be  at  liberty  to  invest  money  as  they 
so  choose,  and  appoint  directors  for  the  management 
of  the  undertaking. "  "Profits  derived  from  the 
working  of  these  railways  shall  be  justly  divided  pro 
rata  between  the  shareholders  without  regard  to 
nationality."  The  original  capital  of  the  Company 
was  54,000,000  marks,  but  when  the  Company  took 
over  the  rights  and  property  of  the  Shantung  Mining 
Company  on  January  1,  1913,  the  capital  was 
increased  to  60,000,000  marks,  divided  into  60,000 
shares  of  100  marks  each.  The  annual  meeting  of 
the  Shantung  Railway  Company  held  at  Berlin  in 
June,  1914,  passed  a  resolution  authorising  an 
increase  of  the  capital  by  10,000,000  more  marks,  in 
order  to  erect  iron  and  steel  works  at  Tsang-kow  near 
Tsingtao.  This,  however,  was  not  carried  out  be- 
cause of  the  outbreak  of  the  war. 

The  construction  work  of  the  railway  was  started 
in  the  presence  of  Prince  Henry  of  Prussia,  who  was 


THE  RAILWAYS  IN  SHANTUNG  175 

then  on  his  Far  Eastern  tour  of  conquest.  His  Royal 
Highness  turned  the  first  sod  when  the  grading  for 
the  road-bed  began  on  September  23,  1899,  both  at 
Tsingtao  and  Kiao-chowfu.  "The  object  of  con- 
structing these  lines"  reads  the  Lease  Convention  of 
1898,  "is  solely  the  development  of  commerce.  In 
inaugurating  a  railway  system  in  Shantung,  Ger- 
many entertains  no  treacherous  intentions  towards 
China."  The  sixth  article  of  the  Kiaochow-Tsinan 
Railway  Agreement  provides  against  popular  objec- 
tions due  to  the  disregard  by  foreign  powers  of  the 
customs  and  superstitions  of  the  natives.  "In  con- 
structing the  railway,"  reads  the  said  article,  "the 
Company  must  go  around  small  villages  and  market 
towns,  also  ancestral  halls,  temples,  graveyards, 
dwellings,  and  water-ways,  orchards  and  vegetable 
gardens.  These  must  not  be  made  to  suffer  on 
account  of  the  railway.  And  as  for  specially  large 
and  well-arranged  graveyards,  these  must  receive 
special  regard."  With  this  specific  undertaking  on 
the  part  of  the  Company,  the  construction  work  of 
the  railway  went  on  rapidly  and  without  serious 
interruption,  and  in  less  than  five  years  it  was  all 
completed.  The  first  section  of  74  kilometres  from 
Tsingtao  to  Kiaochow  was  opened  to  traffic  on  April 
8,  1901,  and  further  sections  were  put  into  operation 
during  the  same  year. 

On  June  1,  1902,  the  whole  of  the  first  half  of  the 
trunk  line  as  far  as  Weihsien  was  opened  to  freight 
and  passenger  traffic,  and  on  June  1,  1904,  the  entire 
line,  including  the  Po-shan  branch,  was  opened.  The 
entire  cost  of  construction  and  equipment  was  esti- 
mated at  52,901,266  marks.  The  trunk  line  is  about 


176  THE  SHANTUNG  QUESTION 

412  km.,  or  256  miles,  in  length,  and  the  branch  line 
between  Changtien  Station  to  Po-shan  is  43  km.,  or 
about  27  miles. 

The  Shantung  railways  pass  through  one  of  the 
richest  and  most  populous  provinces  of  China.  The 
trunk  line  traverses  through  the  rich  agricultural 
territory,  while  the  branch  line  connects  with  the 
coal  mines  in  the  province.  Another  branch  line  of 
about  two  miles  runs  from  East  Station  of  Tsinanfu 
to  Huang-tai-ehiao,  on  the  bank  of  Hsiao-chin  River, 
largely  for  the  conveyance  of  salt  which  is  brought 
over  by  the  Chinese  junks  from  the  salt  fields  border- 
ing on  the  gulf  of  Pechili. 

The  time,  money,  and  energy  which  had  been  cheer- 
fully spent  by  Germany  to  build  her  "  place  in  the 
sun"  in  the  Orient  were  all  spent  for  nothing.  Ger- 
many rose  only  to  fall.  By  the  Versailles  Settle- 
ment, Japan  has  got  all  the  fruits  of  German  labour, 
not  only  the  railways,  but  also  a  number  of  other 
valuable  concessions  which  we  shall  consider  a  little 
later.  Repeating  her  tactics  in  the  Russo-Japanese 
War  which  resulted  in  the  tranf  erence  of  all  the  Rus- 
sian rights  and  properties  in  South  Manchuria  to 
Japan,  not  to  China,  and  improving  it  this  time  by 
previous  secret  understandings  with  Italy,  Russia, 
France,  and  Great  Britain,  Japan  at  the  Peace  Con- 
ference acquired  by  might  what  belongs  to  China  by 
right.  Such  acquisition  only  serves  to  remind  us  of 
the  Bible  story  of  King  Ahab  who,  panting  for  the 
vineyard  of  Naboth,  but  disappointed  over  the 
owner's  refusal  to  part  with  it,  resorted  to  the  most 
hideous  methods  of  acquiring  it.  "  China  presented 
to  the  Peace  Conference  a  claim  based  only  on  justice, 


THE  RAILWAYS  IN  SHANTUNG  177 

but  with  no  power  behind  it,"  said  Senator  James  B. 
Watson.  "  Japan  presented  a  case  based  only  on 
power,  but  with  no  justice  behind  it.  Japan  and 
power  won.  China  and  justice  lost. " 

But  this  was  not  all.  Apart  from  the  transference 
of  the  Shantung  Railway  and  its  branches,  as  decided 
by  the  Peace  Conference,  Japan,  under  the  notes 
exchanged  between  Baron  Goto  and  Tsung-hsiang 
Chang,  on  September  24,  1918,  obtained  new  railway 
concessions  in  the  Shantung  province.  A  new  con- 
tract was  secured  by  Japan  by  taking  advantage  of 
the  impecuniosity  of  the  Peking  Government — an 
advance  of  20,000,000  yen  at  8  per  cent,  interest  being 
made  after  the  signature.  The  contract  called  for 
the  construction  of  two  lines,  one  from  Tsinanfu 
(Shantung)  to  Shunteh-fu  (Chili)  on  the  Peking- 
Hankow  line  of  150  miles,  and  another  from  Kaomi 
(Shantung)  to  Hsu-chow-fu  (Kiangsu)  of  some  250 
miles  on  the  Tien-tsin-Pukow  Railway.  It  was 
Japan's  intention  that,  when  these  schemes  were 
realised,  Tsingtao  would  be  connected  with  all  the 
important  railways  in  Northern  China.  In  other 
words,  when  these  lines  were  built,  in  addition  to  the 
lines  now  in  operation,  Tsingtao,  where  Japan  was 
to  have  an  exclusive  concession,  as  she  had  insisted 
upon,  would  be  brought  into  railway  communication 
with  Southwestern  Shantung,  Chili,  Shansi,  Honan, 
and  other  provinces  of  North  China.  With  the  aid 
of  the  shipping  facilities  at  Japan's  disposal,  which 
will  be  taken  up  in  a  later  chapter,  she  hoped  to  make 
Tsingtao,  where  she  had  planned  a  permanent  stay, 
out-distance  and  out-rival  Tien-tsin  in  the  North  and 
Shanghai  in  the  South.  A  great  deal  of  traffic  that 


178  THE  SHANTUNG  QUESTION 

is  seeking  its  way  out  to  the  open  sea  through 
Shanghai  and  Hankow  in  central  China  and  through 
Tien-tsin  on  the  North  would  at  once  find  its  way 
to  Tsingtao.  Mr.  Yoshinosuke  Akiyama,  the  Jap- 
anese civil  Governor  of  Kiaochow,  who  had  fully 
appreciated  the  importance  of  Tsingtao  as  a  com- 
mercial port  and  as  a  site  for  industrial  expansion, 
had  rightly  said:  "The  port  holds  behind  it,  not 
only  the  rich  resources  of  Shantung,  but  also  the 
products  of  Shansi,  Honan,  Shensi,  and  other  prov- 
inces where  coal,  iron,  and  other  products  are 
plentiful,  which  will  all  come  to  Tsingtao  for  ship- 
ment abroad. " 

Of  course,  these  two  new  lines  were  based  upon  or 
similar  to  the  concessions  which  Germany  had  from 
the  Chinese  Government  before  the  war.  It  is  to  be 
recalled  that  on  December  31,  1913,  a  preliminary 
contract  was  signed  by  the  Chinese  Government  and 
the  German  representative  for  the  construction  of 
two  railways,  one  from  Tsinanfu  to  a  point  on 
the  Peking-Hankow  Railway  (somewhere  between 
Shuntehfu  and  Hsin-hsiang-hsien)  and  the  other 
from  Kaomi  to  Hanchuang  on  the  Tien-tsin-Pukow 
Railway.  In  consideration  of  this  concession,  the 
Shantung  Railway  Company  agreed  to  cancel  all 
rights  of  railway  construction  in  the  Shantung 
province  as  provided  for  in  the  Convention  of  1898. 
The  final  contract  was  signed  on  June  24, 1914,  with- 
out essential  alteration.  The  outbreak  of  the  War 
in  Europe  interrupted  the  German  activity  in  Shan- 
tung, but  served  as  a  fresh  opportunity  for  Japan  to 
enter  into  the  field.  Japan  had  been  aware  of  this  con- 
cession to  the  Shantung  Railway  Company,  and  so 


THE  RAILWAYS  IN  SHANTUNG  179 

without  waiting  for  the  post-bellum  settlement,  the 
Japanese  Government  secured  the  identical  conces- 
sion, by  hook  or  crook,  from  the  military  men  in  the 
Peking  Government.  It  is  important  to  bear  in  mind 
that  the  argument  which  the  Japanese  Government 
used  in  securing  this  concession  was  that  the  grant 
made  to  Germany  was  made  invalid  by  China's 
declaration  of  war  upon  that  power,  and  therefore  a 
new  grant  to  Japan  covering  the  same  routes  would 
not  be  in  conflict  with  the  existing  agreements.  This 
was  admittedly  a  good  ground  to  take,  but  one  queries 
if  the  railway  concession  to  Germany  was  nullified 
by  China's  declaration  of  war  as  argued  by  the 
Japanese  Government,  how  is  it  that  the  Lease  Con- 
vention was  not.  It  is  queer,  to  say  the  least,  that 
Japan  would  blow  hot  and  cold  at  the  same  time.  It 
is  also  important  to  bear  in  mind  that  this  concession 
for  the  construction  of  two  new  lines  as  mentioned 
above  was  made  by  a  few  military  leaders  in  the 
Peking  Government,  through  the  Chinese  Minister  at 
Tokio,  but  without  the  permission  or  knowledge  of 
the  Chinese  Cabinet,  without  the  Presidential  sanc- 
tion, and  without  the  legislative  approval.  It  is 
unnecessary  here  to  enter  into  the  fine  points  of 
International  Law  in  regard  to  the  validity  of  such 
an  agreement.  As  to  this  question,  there  can  be  but 
one  opinion. 

The  seizure  of  the  Shantung  railways  was  a  dis- 
tinct violation  of  China's  territorial  sovereignty. 
This  is  a  point  which  ought  to  be  obvious  to  all.  The 
more  practical  aspect  of  the  question,  however,  is  the 
immediate  displacement  of  thousands  of  Chinese  who 
had  been  employed  on  the  railroads  while  under  Ger- 


180  THE  SHANTUNG  QUESTION 

man  management,  but  who  were  immediately  dis- 
charged and  replaced  by  Japanese  when  the  railroads 
passed  into  Japanese  hands.  On  this  point  we  can  do 
no  better  than  to  quote  the  following  remark : 

"  Control  of  the  railway  was  signallised  by  the  discharge  of 
all  Chinese  workmen  above  the  menial  grades.  Even  many  of 
the  classes  which  are  ordinarily  considered  menial,  but  which 
offer  experience  which  prepares  for  higher  grades,  were  subject 
to  this  innovation.  During  German  exercise  of  railway  rights, 
all  engine  drivers,  train  staff,  station  masters,  machinists,  fore- 
men of  all  but  the  highest  rank,  clerical  staff,  except  those  in 
highly  technical  positions,  were  Chinese.  Germans  had  been 
able  to  build  and  operate  this  line  and  bring  it  up  to  a  favourable 
standard  of  efficiency  and  profitableness  using  Chinese  in  these 
positions  of  skill  and  responsibility.  But  the  Japanese  cut  off 
this  source  of  livelihood  from  these  thousands  of  Chinese.  The 
railway  is  actually  as  well  as  governmentally  in  the  hands  of 
the  Japanese,  which  means  much  in  the  programme  of  using  the 
railroad  for  purposes  of  discrimination.  It  is  perhaps  too 
obvious  to  require  mention,  that  in  this  first  example  of  'suc- 
cession to  German  economic  privileges'  the  Japanese  seized  in 
addition  vastly  greater  economic  privileges  which  had  hitherto 
been  looked  upon  as  Chinese,  and  they  seized  the  opportunity  of 
planting  an  army  in  China.  The  Shantung  Railway  is  trans- 
formed from  an  instrument  for  the  development  of  China  into 
an  instrument  for  the  penetration  of  China. 

"On  the  other  lines  of  railway  in  China  the  foreign  interests 
have  placed  only  a  limited  number  of  representatives — a  few 
technical  men  and  inspectors  for  the  most  part.  On  no  other 
line  would  the  foreign  personnel  exceed  more  than  one  or  two 
per  cent,  of  the  total  number  of  employes.  But  on  the  lines  con- 
trolled by  Japan  (in  Shantung  and  in  Manchuria  as  well),  every 
man  above  the  grade  of  track  coolie  is  a  Japanese.  Japanese 
police  guard  the  track  and  Japanese  garrisons  occupy  the  termi- 
nals. And  when  one  remembers  that  every  one  of  these  men 
has  gone  through  the  training  required  in  the  Japanese  military 
conscription  system,  one  realises  what  it  means  to  have  the  lines 
of  communication  extending  so  far  into  the  interior  in  the  hands 
of  Japanese.  It  means  that  in  a  military  way  China  is  ham- 
strung. She  has  no  chance  of  mobilising  an  army,  be  it  ever  so 
well  trained  and  armed.  Between  the  Manchurian  lines  on  the 


THE  RAILWAYS  IN  SHANTUNG  181 

north  and  the  province  of  Chili  containing  Peking  and  Tientsin, 
she  is  between  the  jaws  of  the  nut  cracker." 

An  equally  serious  matter  was  Japan's  claim  to  a 
controlling  voice  in  determining  as  to  what  develop- 
ment work  or  industrial  expansion  in  Shantung 
should  be  undertaken  and  who  was  to  undertake  it. 
In  the  Convention  of  1898  between  China  and  Ger- 
many, it  was  stipulated  that  in  all  cases  where  foreign 
assistance  in  person,  capital,  or  material,  might  be 
needed  for  any  purpose  whatever  in  the  province  of 
Shantung,  such  work  or  supply  of  materials  should 
be  offered  in  the  first  instance  to  German  manufac- 
turers and  merchants.  As  successor  by  virtue  of  the 
Versailles  Treaty  to  the  German  rights,  titles,  and 
privileges,  Japan  now  claimed  that  Japanese  mer- 
chants and  manufacturers  should  have  the  right  of 
first  choice.  With  this  right,  Japan  would  be  in  a 
position  to  control,  absolutely  and  irrevocably,  the 
economic  development  of  the  whole  province.  Take 
for  instance  the  case  of  the  Chefoo-Weihsien  Rail- 
way. For  years  and  years  the  merchants  in  Chef oo 
agitated  for  the  construction  of  a  railway  line  be- 
tween that  city  and  Wei-hsien  for  the  development  of 
the  trade  in  the  province,  and  for  years  their  efforts 
were  obstructed.  It  was  Germany  who  had  first 
asserted  the  right  of  first  choice.  This  claim  was 
abandoned  by  Germany  in  June,  1914,  in  consider- 
ation for  a  new  grant  by  the  Chinese  Government  for 
the  building  of  two  railways  above-mentioned.  When 
Japan  took  Germany's  place  in  Shantung,  she  still 
persisted  in  the  claim  that  she  should  be  first  con- 
sulted in  all  railway  enterprises  in  the  province. 
China  was  so  hampered  financially  that  it  was  idle 


182  THE  SHANTUNG  QUESTION 

to  talk  of  financing  it  herself;  she  was  at  the  same 
time  unwilling  to  borrow  Japanese  money  to  build 
the  line.  The  result  is  that  so  far  the  desire  cherished 
by  the  people  in  Shantung  remains  yet  unrealised. 

This  was  exactly  the  railway  situation  in  Shantung 
in  the  last  few  years,  for  which  the  Versailles  settle- 
ment was  directly  responsible.  And  this  situation 
would  continue  indefinitely  and  perhaps  permanently 
if  it  were  not  for  the  happy  adjustment  reached  at 
Washington,  which  practically  reversed  the  terms  of 
the  Versailles  Treaty  as  far  as  the  Shantung  pro- 
visions were  concerned.  The  details  of  negotiation 
incident  to  the  transfer  of  the  Kiaochow-Tsinan  Rail- 
way and  its  branches  will  be  given  in  a  later  chapter. 
It  is  sufficient  to  say  here  that,  for  their  restoration, 
China  engages  to  pay  a  sum  of  53,406,141  gold  marks, 
plus  costs  for  permanent  improvements  and  minus 
the  allowance  for  depreciation  of  the  railway  prop- 
erties. As  to  the  Kaomi-Hsuchow  and  Tsinan-Shun- 
teh  lines,  they  "  shall  be  made  open  to  the  common 
activity  of  an  international  financial  group,  on  terms 
to  be  arranged  between  the  Government  of  the 
Chinese  Republic  and  the  said  group. "  Japan  has 
also  renounced  her  "option"  for  financing  the 
Chef  oo-Weihsien  Railway,  the  construction  of  which 
may  be  given  to  the  Consortium  if  China  should  find 
it  impossible  to  raise  sufficient  Chinese  capital  for 
the  purpose. 

With  this  adjustment,  the  railway  or  railways 
which  would  otherwise  remain  in  Japan's  hands  as  a 
sharp  instrument  of  peaceful  penetration  of  Shan- 
tung, will  revert  back  to  China  as  an  instrument  for 
her  internal  development. 


XIV 

THE  MINES  IN  SHANTUNG 

WE  have  so  far  considered  Japan's  economic 
position  in  Shantung  with  special  refer- 
ence to  her  control  of  the  railways.    The 
next  question  of  importance  is  the  number  of  mines, 
coal,  iron,  and  gold,  which  Japan  has  acquired  as  a 
result  of  the  European  war,  or  more  accurately,  as  a 
result  of  the  Shantung  award  reached  at  the  Ver- 
sailles Peace  Conference. 

By  the  Convention  of  March  6, 1898,  Germany  was 
given  the  right  to  operate  mines  in  the  Shantung 
Province.  "The  Chinese  Government  will  allow 
German  subjects  to  hold  and  develop  mining  prop- 
erty for  a  distance  of  30  li  from  each  side  of  the 
(Shantung)  railways  and  along  the  whole  extent  of 
the  lines."  Now  by  virtue  of  Article  156  of  the 
Treaty  of  Peace  signed  at  Versailles,  "all  German 
rights  in  Tsingtao-Tsinanfu  Railway,  including  its 
branch  lines,  together  with  subsidiary  property  of  all 
kinds,  stations,  shops,  fixed  and  rolling  stock,  mines, 
plant  and  material  for  the  exploitation  of  the  mines 
are  and  remain  acquired  by  Japan,  together  with  all 
rights  and  privileges  attaching  thereto."  Japan  has, 
therefore,  considered  herself  the  successor  to  those 
mines  and  she  has  worked  on  them  even  before  her 
title  could  be  solemnly  confirmed.  We  need  only 
enumerate  them  in  order  to  know  what  they  are  and 

183 


184  THE  SHANTUNG  QUESTION 

what  they  may  mean  to  Japan's  industrial  and  eco- 
nomic future. 

In  the  first  place  we  have  to  mention  the  Po-shan 
Coal  Mine,  which  is  the  largest  in  the  Shantung 
Province.  Measuring  fourteen  miles  from  North  to 
South  and  about  seven  miles  from  East  to  West,  it 
has  an  area  the  size  of  which  can  be  estimated  by 
simple  mathematical  calculation.  Before  the  out- 
break of  the  war,  it  was  worked  by  the  Schantung 
Bergbau  Gesellschaft,  or  the  Shantung  Mining 
Company,  which  was  incorporated  into  the  Shantung 
Railway  Company,  on  January  1,  1913,  with  an 
increase  of  the  capital  of  the  Company.  Two  shafts 
were  dug  by  the  Germans  at  Hungshan  and  Tze- 
Chwan,  which,  when  worked  to  full  capacity  could 
furnish  2,000  tons  of  coal  daily,  and  about  700,000 
tons  annually.  There  is  a  branch  line  of  the  Shan- 
tung Railway  reaching  the  mine  fields  to  facilitate 
transportation.  The  Japanese  authorities  now  in 
charge  of  the  operation  have  been  planning  to  in- 
crease the  daily  product  of  the  mine.  According  to 
expert  judgment,  a  practically  unlimited  increase 
in  the  production  of  coal  of  the  Po-shan  mine  is  only 
a  matter  of  increased  labour  and  increased  invest- 
ment. 

So  far  as  statistics  and  investigations  show,  the 
Po-shan  coal  field  has  a  wonderful  future  for  develop- 
ment; the  quality  and  quantity  of  its  products  out- 
rival all  the  rest.  According  to  a  careful  study  given 
in  the  Far  Eastern  Review,  it  was  discovered  in  1904 
that  just  268  metres  (878  feet)  beneath  the  surface 
there  were  three  strata  groups  with  varying  qualities. 
The  first  group,  100  metres  (328  feet)  below  the 


THE  MINES  IN  SHANTUNG  185 

characteristic  top  layer,  shows  four  single  strata  of 
two  and  one-half  metres  (8.2  feet)  altogether,  of  a 
really  first  class  rich  coal,  having  about  17  per  cent, 
gas  and  about  8  per  cent.  ash.  The  second  group, 
situated  about  60  metres  (196.8  feet)  from  the  first, 
contains  three  strata  in  17  metres  (55.8  feet),  having 
altogether  1.8  metres  (5.9  feet)  coal,  likewise  of  the 
best  quality  but  containing  on  the  average  15  per 
cent,  gas  and  10  per  cent.  ash.  At  a  further  dis- 
tance of  100  metres  (328  feet)  a  third  group  of  4 
strata  is  found  in  an  extensive  mountain  layer  of 
about  20  metres  (65.6  feet)  containing  4.2  metres 
(13.8  feet)  of  an  anthracite  coal,  having  12  per  cent, 
gas  and  12  per  cent,  ash,  but  of  considerable  heating 
value. 

Another  rich  coal  mine  is  found  at  Fang-tze, 
which  can  be  reached  by  a  short  colliery  line  of  three 
miles.  It  contains  seams  of  200  metres  in  length. 
It  was  estimated  by  German  experts  to  contain 
100,000,000  tons  of  bituminous  coal.  At  present  two 
pits  are  being  worked  by  the  Japanese,  yielding  1,000 
to  1,300  tons  daily.  A  washing  station  and  a 
briquette  factory  are  attached  to  the  mine,  the  former 
handling  about  1,000  tons  a  day,  and  the  latter  about 
700.  The  Fang-tze  coal  has  found  a  very  good  mar- 
ket in  Tsingtao  in  particular  for  house  and  kitchen 
use,  while  the  coal  produced  at  Po-shan  seems  to 
enjoy  greater  popularity  as  ship's  coal.  The  Po-shan 
coal  is  largely  used  in  the  manufacture  of  coke  in 
Shantung  and  elsewhere.  Its  heating  value  varies 
from  10  per  cent,  to  17  per  cent.  It  is  therefore  very 
suitable  for  oven  heating.  Another  excellent  quality 
of  the  Po-shan  coal  is  its  smokelessness,  and  for  this 


186  THE  SHANTUNG  QUESTION 

reason,  it  bids  fair  to  substitute  for  the  expensive 
Cardiff  coal  used  on  war-ships.  The  Japanese 
authorities  have  been  careful  enough  to  see  that  all 
products  are  shipped  to  Japan,  where  the  demand  for 
the  first  class  coal  is  greater  than  the  supply.* 

The  Weihsien  coal  field  was  operated,  beginning 
from  1902,  by  the  Schantung  Eisenbahn  Gesellschaft 
with  a  capital  of  12,000,000  marks.  Its  output  is  in 
the  main  bituminous,  containing  about  15  per  cent, 
ash  and  30  per  cent.  gas.  The  Weihsien  coal  has  a 
high  heating  power — almost  7,000  calories — and  it 
also  has  the  advantage  of  having  a  lighter  smoke. 

The  principal  seam  of  coal  is  about  nine  feet  thick, 
at  a  depth  of  450  feet,  running  from  N.  E.  to  S.  W. 
The  top  seam  is  of  6.6  feet  thick.  Beneath  the  prin- 
cipal seam  is  a  third  stratum  of  about  9.8  feet  depth. 

The  producing  capacity  of  the  Weihsien  coal 
field  is : 

1910-1911 193,497.05  tons 

1911-1912 205,184.00  tons 

1913 199,000.00  tons 

*  The  coal  mines  previously  worked  by  the  Germans  were  taken  over  by 
the  Japanese  after  the  fall  of  Tsingtao.  The  following  details  are  extracted 
from  the  February,  1921  (Shantung)  issue  of  the  Far  Eastern  Review. 

Fangtze  Coal  Mines.  Work  at  the  Fangtze  coal  mines  in  the  Weihsien 
District,  was  started  in  1901,  and  the  output  of  coal  (bituminous)  ranging 
from  200,000  to  270,000  tons  per  annum  between  1907  and  1913.  The 
Germans  disabled  the  pumps  after  the  outbreak  of  the  war,  with  the 
result  that  the  main  shaft  was  flooded,  and  has  been  abandoned  by  the 
Japanese.  Only  the  Briquette  factory  is  still  in  use. 

Several  new  shafts  have  been  sunk  since  the  Japanese  occupation,  of 
which  the  following  deserve  mention: 

Fangtze  East:  This  is  a  new  mine  opened  by  the  Japanese  about  one 
mile  S.  E.  of  the  main  shaft.  It  is  236  feet  deep,  with  a  30  degree  incline  to 
324  feet.  Output  from  March  to  December,  1920,  was  about  30,000  tons. 
Present  output  about  150  tons  per  day. 

Fangtze  West:  Two  miles  west  of  the  original  shaft.  Now  produces 
about  100,000  tons  per  annum.  Four  shafts  ranging  from  120  to  130  feet 
in  depth.  Constant  pumping  necessary  to  keep  galleries  free  from  water. 
Present  output  about  200  tons  per  day.  Maximum  output  380  tons  per  day. 

Fangtze  North  and  Central  Shafts:     Not  yet  producing. 


THE  MINES  IN  SHANTUNG  187 

Aside  from  the  mines  mentioned  above  there  are 
other  rich  coal  fields  on  both  sides  of  the  Kiaochow- 
Tsinan  Railway.  The  Hung-shan  coal  mine  started 
by  the  Germans  in  1902,  has  an  annual  output  (anth- 
racite) of  414,000  tons.  The  machinery  for  the 
operation  of  this  mine  was  damaged  after  the  Jap- 
anese captured  Shantung.  Eepairs  were  made  and 
completed  in  May,  1915,  but  it  was  not  until  July  that 
the  Japanese  were  able  to  resume  work.  The  deposits 
at  Hung-shan  are  estimated  at  800,000,000  tons.  The 
mine  at  Yi-hsien  has  an  annual  output  of  198,000 
tons  and  the  coal  fields  at  Tanen-kow  and  at  I-chow 
yield  an  annual  output  of  72,000  and  30,000  tons, 
respectively. 

But  more  important  and  perhaps  more  attractive 
to  Japan  than  these  coal  mines  is  the  Chinlingchen 
iron  mine,  which  is  situated  about  five  miles  off  the 
main  line  of  the  Shantung  Railway  and  about  180 
miles  from  Tsingtao.  This  is  one  of  the  richest  iron 
mines  in  China,  and  as  such  it  has  been  the  greatest 
attraction  for  the  Japanese.*  The  iron  deposit 
of  Chinlingchen  is  estimated  at  something  like 
100,000,000  tons,  and  according  to  the  analysis  made 
by  German  experts,  it  contains  65  per  cent,  of  iron, 
23  or  24  per  cent,  of  manganese,  3  per  cent,  of  phos- 
phorus, and  8  per  cent,  of  sulphur.  This  analysis 
does  not  differ  very  much  from  those  made  by  the 

*"The  year  1918,"  wrote  Mr.  W.  R.  Peck,  American  Consul  at  Tsingtao, 
"witnessed  the  opening  of  the  Chinlingchen  iron  mine,  and  the  building  of  the 
branch  railway  line  to  the  mine  necessitated  the  purchase  of  five  miles  of  rails, 
ninety  ore  cars,  five  locomotives,  etc.  With  the  exception  of  the  locomotives 
the  supplies  mentioned  were  furnished  by  the  Wakamatsu  Iron  Works  of 
Japan,  to  which  the  railway  is  under  contract  to  supply  about  150,000  tons 
of  ore  annually.  The  total  cost  of  this  branch  railway  and  equipment  is 
about  $1,000,000." — Julean  Arnold,  Commercial  Handbook  of  China,  Vol.  I, 
p.  641. 


188  THE  SHANTUNG  QUESTION 

Japanese  experts  appointed  by  the  Japanese  Govern- 
ment for  that  purpose.  Like  the  coal  mines,  it  was 
being  worked  by  the  Shantung  Railway  Company 
before  the  war  with  very  good  results.  The  annual 
output  was  about  350,000  tons.  Since  the  Japanese 
occupation  in  November,  1914,  there  have  been  on 
foot  various  schemes  for  increasing  the  annual  out- 
put, among  which  is  the  scheme  for  establishing  a 
large  iron  foundry  in  the  Kiaochow  leased  territory. 
Several  attempts,  more  or  less  unsuccessful,  were 
made  by  private  Japanese  to  make  experimental 
borings  in  the  iron  fields.  In  spite  of  the  fact  that 
the  Germans  had  already  excavated  a  shaft  to  a  depth 
of  300  feet  and  that  it  needs  about  50  or  100  feet  more 
to  reach  the  new  vein,  the  Japanese  had  miserably 
failed  to  accomplish  their  object.  Whether  it  was 
due  to  the  lack  of  necessary  experience  and  knowledge 
for  such  engineering  work,  it  is  a  question  which  the 
Japanese  themselevs  can  best  answer.  Late  in  1916 
it  was  decided  that  necessary  experimental  borings 
and  the  completion  of  the  new  shaft  were  to  be  taken 
by  the  Shantung  Railway  Company,  which  has  been 
placed  under  the  control  of  the  Japanese  Govern- 
ment, and  the  entire  cost  was  to  be  defrayed  from 
funds  provided  for  by  the  Japanese  War  Office.  In 
1918,  a  branch  railway  of  about  five  miles  from 
Tsingtao  to  Chinlingchen  mine  fields  was  built  at  an 
estimated  cost  of  $1,000,000. 

With  this  rich  iron  mine  at  Chinlingchen  under 
Japanese  control,  and  with  the  Hanyehping  Company 
being  converted  into  a  Chino- Japanese  joint  concern, 
Japan  can  have  as  her  source  of  supply  two  of  the 
richest  iron  fields  in  China.  Very  high  hopes  have 


THE  MINES  IN  SHANTUNG  189 

been  entertained,  indeed,  by  Japanese  authorities  as 
to  Japan's  future  iron  supply  from  China,  which  is 
practically  inexhaustible.  Writing  in  The  New  York 
Herald  of  May  18,  1919,  Adachi  Kinnosuke ,  a 
Japanese  writer  who  occasionally  visits  the  United 
States  for  propaganda  purpose,  has  this  to  say: 
"Iron  is  the  one  metal  which  fires  the  imagination  of 
Nippon  just  at  present.  She  has  none  of  it  at  home 
to  speak  of.  The  one  outstanding  lesson  which  the 
world  war  has  driven  home  to  her  understanding  was 
that  from  now  on  the  programme  of  her  national 
defence  should  be  worked  out  in  terms  of  iron  ore 
and  steel  works.  And  she  doubtless  places  no  small 
emphasis  on  the  iron  deposit  in  Shantung." 

Besides  iron  and  coal  mines,  there  are  a  few  places 
where  gold  has  been  discovered.  In  the  northern 
part  of  the  province,  principally  at  Chaoyuan, 
Chiutien  (near  Pingtu),  Chinnushan  (near  Mng- 
hai),  Hsiayutsen,  and  Kweishan,  important  gold 
deposits  have  been  discovered.  Numerous  other  gold 
deposits  have  been  located.  At  present,  the  gold  mine 
at  Chaoyuan  is  the  only  gold  mine  in  Shantung  in 
actual  operation,  and  is  said  uto  be  the  only  gold 
mine  that  can  be  profitably  worked."  Recently, 
however,  Japanese  mining  experts  have  examined  the 
tailings  of  these  gold  mines.  They  believe  that  all  of 
them  could  be  worked  with  profit.  As  yet,  no  ac- 
curate or  statistical  information  is  available  as  to 
their  operation  and  capacity.  It  may,  however,  be 
safely  said  that,  in  the  time  to  come,  Japan  will  lay 
her  hands  on  them  as  surely  and  as  firmly  as  on  the 
other  mines.* 

*  According  to  a  survey  made  by  a  Japanese  Government  expert,  there 
are  in  Shantung  ten  gold  mines,  ten  silver,  twenty-seven  coal,  seven  iron, 


190  THE  SHANTUNG  QUESTION 

Admittedly,  the  mines  and  railways  in  Shantung 
are  the  rich  prizes  on  which  Japan  has  set  her 
covetous  eyes.  Writing  in  Geographische  Zeitas- 
chrift  for  1914,  Herr  Schmitthenner  admitted  that 
Japan's  sudden  decision  to  take  part  in  the  war  and 
to  attack  Tsingtao  in  1914  was  influenced  by  her 
desire  to  take  possession  of  the  rich  coal  and  iron 
deposits  in  Shantung.  This  stated,  however,  but  part 
of  the  truth.  Japan's  real  object  was  to  get  control 
of  the  Shantung  railways  and  to  link  them  with  the 
railways  in  Manchuria,  also  under  her  control,  so  as 
to  enable  her  to  dominate  Northern  China. 

During  the  " conversations"  held  in  connection 
with  the  Washington  Conference,  the  disposition  of 
these  mines  in  Shantung  was  among  the  most  difficult 
problems  to  solve.  The  Japanese  denied  that  they 
had  opened  up  mining  areas  other  than  those  which 
the  Germans  had  opened  in  1914,  although,  in  certain 
mines,  they  admitted,  new  shafts  had  been  sunk. 
Pressed  for  exact  information  as  to  Japan's  mining 
activities  in  Shantung,  they  submitted  the  following 
facts,  which  were  recorded  in  the  minutes  of  the 
negotiation : 

'  *  There  were  three  mining  districts  which  were  actually  being 
operated  by  the  Japanese, — namely,  Tzechwan,  Fangtze  and 
Chinlingchen,  the  first  two  being  coal  mines,  and  the  third  an 
iron  mine.  The  coal  mines  at  Tzechwan  had  an  area  of  418 
square  kilometres,  with  a  daily  production  of  468  tons  of  coal, 
which  amount  was  increasing  each  year.  The  Fangtze  coal 
mines  had  an  area  of  528  square  kilometres.  Under  German 
enterprise  these  mines  had  not  been  productive,  but,  under 
Japanese  operation  good  results  had  been  obtained,  and,  in  the 

and  sixteen  others,  thus  making  a  total  of  seventy  mines. — China  (an 
official  guide  book  to  Eastern  Asia,  published  by  the  Imperial  Japanese 
Government  Railways,  1915),  Chapter  X. 


THE  MINES  IN  SHANTUNG  191 

year  1917,  400  tons  daily  were  produced.  The  iron  mines  at 
Chinlingchen  had  an  area  of  283  square  kilometres.  In  1919 
the  production  amounted  to  178,000  tons.  The  mines  of  Chang- 
tien,  mentioned  in  the  Sino-German  Agreement  of  1911  had 
apparently  been  abandoned." 

While  agreeing  in  principle  that  these  mines 
should  be  given  back  to  China,  the  Japanese  pre- 
ferred to  have  them  given  over  to  a  group  of  Chinese 
and  Japanese  capitalists  for  their  future  operation. 
The  position  of  the  Chinese  was  that  these  mines, 
after  being  restored  to  China,  should  be  operated 
in  conformity  to  her  mining  regulations.  The  coal 
mines  could  be  operated  by  a  company  to  be  organ- 
ised, in  which  the  Japanese  could  own  as  much  as 
fifty  per  cent,  of  the  stock.  The  iron  mines  must  be 
left  to  China  alone,  for,  according  to  the  mining  regu- 
lations of  the  Chinese  Government,  issued  on  Novem- 
ber 27, 1915,  no  foreign  capital  can  be  allowed  in  iron 
mining.  The  Japanese  objected,  of  course,  to  this 
separate  treatment  of  the  iron  mines.  They  insisted 
that  all  the  mines  to  be  restored  to  China  should  be 
given  to  a  Chino- Japanese  joint  concern,  "in  which 
Chinese  and  Japanese  capital  shall  stand  on  an 
entirely  equal  footing."  After  much  argument,  the 
Chinese  and  the  Japanese  reached  this  formula  of 
solution,  which  was  finally  embodied  in  the  Shantung 
Agreement:  uThe  mines  of  Tzechwan, 'Fangtze  and 
Chinlingchen,  for  which  the  mining  rights  were 
formerly  granted  by  China  to  Germany,  shall  be 
handed  over  to  a  company  to  be  formed  under  a 
special  charter  of  the  Government  of  the  Chinese 
Republic,  in  which  the  amount  of  Japanese  capital 
shall  not  exceed  that  of  Chinese  capital." 


192  THE  SHANTUNG  QUESTION 

A  " special  charter"  is  necessary  in  order  to  pass 
over  the  mining  regulations,  which  forbid  foreign 
investment  in  iron  mining. 

The  yearly  output  of  the  Shantung  mines  can  be 
roughly  estimated  as  follows : 

1.  Po-shan     .  .      .      .      .      .      .  414,000  tons 

2.  Wei-hsien 199,000  tons 

3.  Hungshan 410,000  tons 

4.  Fangtze 200,000  tons 

5.  Yi-hsien       ......  198,000  tons 

6.  Tanenkow 72,000  tons 

7.  I-chow 30,000  tons 

8.  Tzechwan 138,000  tons 

9.  Chinlingchen 178,000  tons 


XV 

JAPAN'S  CONTEOL  OF  COMMERCIAL  FACILITIES 

JAPAN'S  economic  weapons  in  Shantung  are 
further  multiplied  and  made  more  effective  by 
the  numerous  steamship  lines  which  she  has 
maintained  both  between  Chinese  and  Japanese  ports 
and  along  the  China  coast.  It  must  be  admitted,  of 
course,  that  these  steamship  lines  are  not  acquired 
from  Germany  as  a  result  of  the  war.  They  have 
been  maintained  by  the  Japanese  Government,  im- 
proved and  enlarged  during  the  last  six  or  seven 
years.  While  the  whole  world  was  engaged  in  the 
war,  Japan  had  time  enough  to  see  that  her  trades- 
men and  merchants  were  safely  entrenched  in  the 
most  fertile  field  of  China  trade.  Every  evidence 
points  to  the  fact  that  Japan  has  in  recent  years,  par- 
ticularly after  the  outbreak  of  the  war,  exhibited 
remarkable  acumen  in  the  expansion  of  her  mer- 
cantile marine,  and  in  the  increase  of  shipping 
facilities  for  the  China  coast  trade.  According  to 
the  report  of  the  Canadian  Trade  Commissioner  in 
Yokohama,  Mr.  A.  E.  Bryan,  to  his  Government  in 
Ottawa,  Japan  has  made  great  strides  in  the  last 
seven  years  in  the  direction  of  ship-building.  At  the 
outbreak  of  the  war  in  1914,  there  were  only  17  berths 
for  the  construction  of  steel  ships  in  Japanese  ship- 
building yards,  while  in  1918  there  were  close  on  150. 

193 


194  THE  SHANTUNG  QUESTION 

In  1914,  16  vessels  were  launched  with  a  tonnage  of 
78,010,  and  in  1918,  185  steel  vessels  were  launched 
with  a  total  of  513,534  tons.  The  following  schedule 
throws  some  light  on  the  earnest  bid  which  Japan  has 
made  for  China  trade,  and  the  high  hopes  which  the 
Japanese  people  have  held  in  regard  to  Tsingtao.  A 
glance  will  be  sufficient  to  bring  home  the  realisation 
that  the  future  trade  in  northern  China  and  the  open 
door  in  Shantung  or  in  Manchuria  are  absolutely  at 
the  mercy  of  Japan. 

Since  the  capture  of  Tsingtao  in  November,  1914, 
the  port  has  been  equipped  with  the  following  steam- 
ship connections  with  Chinese  and  Japanese  ports : 

1.  Between  Tsingtao  and  Tien-tsin — The  Osaka  Shosen  Kaisha 
runs  about  four  steamers  of  fairly  large  tonnage  between  Tien- 
tsin and  Ta-kow  (Formosa),  calling  regularly  at  Dairen,  Tsing- 
tao, Shanghai,  and  Foo-chow  every  week. 

2.  Between    Tsingtao   and   Dairen — The    South   Manchurian 
Railway  Company  has  a  few  steamers  of  some  3,000  tons,  plying 
weekly  between  Dairen,  Tsingtao,  and  Shanghai. 

3.  Between  Tsingtao  and  Hongkong — Both  the  Dairen  Kusen 
Kaisha  and  the  Korean  Yusen  Kaisha  have  maintained  regular 
steamship  service  between  Chemulpo,  Dairen,  Tsingtao,  Shang- 
hai, and  Kongkong.    These  steamers  call  at  other  southern  ports 
in  China,  though  not  regularly. 

4.  Between  Tsingtao  and  Japanese  ports — The  Osaka  Shosen 
Kaisha,  together  with  Santo  Domei  Kisen  Kaisha  and  Harada 
Kisen  Kaisha  has  maintained  efficient  weekly  service  between 
Tsingtao  and  Osaka,  calling  at  Kobe,  Ujina,  and  Moji,  on  both 
ways.     The  steamers  engaged  in  this  service  are  more  heavily 
subsidised  by  the  Japanese  Government  than  those  of  any  other 
line,  for  the  reason  that  they  are  to  call  at  Ujina  whence  come 
most  of  the  Japanese  military  supplies  to  China,  and  that  they 
must  reserve  one-sixth  of  freight  and  passenger  space  for  mili- 
tary use.     The  Nippon   Yusen   Kaisha   maintains   fortnightly 
service  between  Tsingtao  and  Osaka,  calling  at  Kobe  and  Moji, 


CONTROL   OF  COMMERCIAL  FACILITIES     195 

hut  not  at  Ujina,  thus  making  the  trip  from  one  port  to  the 
other  in  two  days  less  time  than  the  other  two  services.* 

In  addition  to  these  shipping  facilities,  Japan  has 
also  enjoyed  the  excellent  port  conveniences  at 
Tsingtao,  which  the  Germans  had  provided  for  dur- 
ing their  heydays.  The  port  of  Tsingtao  is  located 
five  miles  from  the  entrance  to  Kiaochow  Bay,  and 
the  harbour  is  landlocked  and  not  susceptible  to  tidal 
influences.  The  harbour,  which  is  said  to  be  the 
model  in  the  Far  East  because  of  its  almost  perfect 
docking  facilities  and  the  direct  transmission  from 
ships  to  freight  cars  alongside,  or  vice  versa,  has  a 
docking  frontage  of  over  7,000  feet  and  is  capable 
of  accommodating  20  vessels  at  a  time.  It  consists  of 
two  moles,  each  having  a  railway  track  for  the  siding 
of  cars  loading  or  unloading  cargo,  and  special  mole 
for  the  landing  of  kerosene  oil  and  combustibles.  The 
two  piers  in  the  Great  Harbour  are  the  Arkona  Pier, 
720  metres  in  length  and  100  metres  wide.  In  the 
Small  Harbour  there  is  a  landing  pier  of  160  metres 
long,  which  is  used  by  the  coasting  steamers  and 
junks.  The  German  Government  at  Kiaochow,  in 
compliance  with  the  increased  shipping  demands, 
erected  in  1910  large  warehouses  at  the  dock, 
equipped  with  the  most  modern  fire  apparatus.  All 
these  excellent  equipments  have  been  in  the  Japanese 
hands  for  the  last  seven  years.f 

This  is  the  barest  outline  of  the  railway  and  ship- 
ping facilities  which  Japan  has  had  at  her  disposal. 
With  her  record  in  Manchuria  as  our  guide,  it  is  easy 

*  U.  S.  Daily  Consular  and  Trade  Reports — Supplement  on  Kiaochow, 
July  17,  1915,  p.  6. 

t  U.  S.  Daily  Consular  and  Trade  Reports,  December  16,  1911. 


196  THE  SHANTUNG  QUESTION 

to  see  what  Japan  could  do  economically  in  the  Shan- 
tung Province.  On  the  one  hand,  with  a  well-devised 
system  of  railways  in  the  Shantung  Province,  where 
such  traffic  inducements  as  Japan  has  offered  to  the 
Japanese  merchants  in  Manchuria  may  also  be 
offered,  under  a  Japanese  Traffic  Manager,  if  neces- 
sary, it  is  only  a  question  of  time  that  Japan  will 
attract  to  Tsingtao  produce  from  an  extensive  hinter- 
land with  a  wealth  of  natural  and  economic  resources 
unsurpassed  in  any  other  parts  of  the  country.  It  is 
as  sure  as  the  sun  rises  in  the  East  that  Japanese 
merchants  will,  in  that  case,  undercut  those  of  other 
nationalities  in  all  fields.  On  the  other  hand,  with  a 
persistent  development  of  shipping  service,  of  which 
we  have  already  seen  the  beginning,  Tsingtao  is 
bound  to  become  the  most  important  port  along  the 
whole  China  coast,  out-distancing  Tien-tsin  in  the 
north  and  beating  Shanghai  in  the  south,  which  holds 
that  distinction  at  present,  but  which  is  seriously 
handicapped  by  the  inadequate  harbour  works  that 
are  incapable  of  accommodating  the  large  ocean- 
going liners.  The  Japanese  port  of  Dairen  has 
already  taken  the  place  of  the  British  port  of  Chef  oo 
as  the  distributing  centre  of  Manchuria.  With  such 
equipments  as  it  has,  the  port  of  Tsingtao  is  bound 
to  absorb  all  the  interior  and  littoral  trade  of  Shan- 
tung and  displace  Tien-tsin  as  the  distributing  centre 
of  North  China.  The  Japanese  Government  makes 
no  secret  of  its  desire  to  secure  for  Japanese  bottoms 
all  the  freight  there  is,  not  only  between  Chinese  and 
Japanese  ports,  but  also  between  ports  on  the  China 
coast.  And  Japan  can  accomplish  this  end  without 
resorting  to  those  extreme  measures,  such  as  prefer- 


CONTROL   OF  COMMERCIAL  FACILITIES     197 

ential  tariff,  railway  rebates,  and  others  which  Japan 
has  adopted  in  Manchuria.  With  a  shipping  service 
sufficient  to  meet  all  the  freight  and  passenger  traffic, 
and  with  the  railways  connecting  the  interior  of 
China  in  the  control  of  a  Japanese  Traffic  Manager, 
it  is  comparatively  an  easy  matter  to  make  Shantung 
another  Manchuria  economically. 


XVI 

JAPAN 'S  PEACEFUL  PENETRATION   OF   SHANTUNG 

THE  record  of  Japan's  seven  years  of  occupa- 
tion of  the  Shantung  province  is  in  every  way 
an  eloquent  testimony  of  her  extraordinary 
activity  in  all  economic  and  industrial  fields.  Not 
only  has  she  operated  and  controlled  the  Shantung 
railway  and  its  branches;  not  only  has  she  opened 
and  exploited  the  rich  coal,  iron  and  gold  mines  along 
the  railways;  not  only  has  she  established  various 
steamship  connections  between  Tsingtao  and  the 
commercial  ports  in  Japan  or  other  ports  on  the 
Chinese  coast,  as  has  been  described  in  a  previous 
chapter ;  and  not  only  has  she  made  Tsingtao  a  prac- 
tically Japanese  entrepot,  the  foreign  settlement 
there  a  Japanese  settlement,  and  the  Chinese  Cus- 
toms Service  a  Japanese  service.  All  this  is  perhaps 
to  be  taken  for  granted.  But  she  has  also  laid  her 
tentacles  on  a  number  of  minor  activities — a  fact 
which  bespeaks  her  systematic  penetration  of  the 
province.  For  the  last  seven  years,  she  has  prac- 
tically taken  over  the  salt  industry  of  the  province ; 
she  has  deprived  the  natives  of  their  trade  and  placed 
it  in  the  hands  of  her  own  nationals ;  she  has  taken 
over  every  commercial  enterprise  which  was  for- 
merly the  source  of  bread  and  butter  for  the  natives ; 
she  has  practically  monopolised  the  fishery  in  the 
leased  territory;  and,  in  short,  she  has  placed  her 

198 


JAPAN'S  PEACEFUL  PENETRATION  199 

fingers  on  the  very  pulse  of  economic  life  of  the  Shan- 
tung province.  Japan's  withdrawal  from  Shantung 
would  be  meaningless  if  she  were  permitted  to  con- 
tinue her  economic  stranglehold.  By  July  or  August, 
1922,  she  may  have  withdrawn  her  troops,  as  stipu- 
lated in  the  Shantung  Agreement  reached  at  the 
Washington  Conference;  she  may  have  given  over 
the  administration  of  the  railways  to  China ;  she  may 
have  restored  the  leased  area  and  transferred  the 
public  properties  to  China;  and  she  may  have  sur- 
rendered to  China  all  the  tit-bits  stipulated  in  the 
Shangtung  Agreement ;  but  in  Shantung  will  Japan 
remain  an  economic  master.  The  root  of  her  eco- 
nomic penetration  has  gone  so  deeply  in  the  fertile 
soil  of  the  province  that  it  is  next  to  impossible  to 
eradicate  it  within  the  short  space  of  six  months  pro- 
vided for  in  the  Agreement. 

It  may  be  difficult  at  first  to  appreciate  to  the 
fullest  extent  how  thoroughly  Japan  has  been  laying 
the  foundation  of  her  economic  future  in  the  prov- 
ince. A  few  specific  instances  of  her  peaceful  pene- 
tration will,  perhaps,  help  us  to  a  keen  realisation  of 
the  situation. 

Aside  from  the  fact  that  the  Japanese  in  Shantung 
have  taken  over  all  the  economic  enterprises  and 
activities  formerly  established  by  the  Germans,  they 
have  blazed  new  trails  in  the  exploitation  of  the 
natural  wealth  of  the  province.  Apparently  at  the 
instance  of  their  Government  at  Tokio,  they  have 
purchased  municipal  utilities,  pretentious  buildings, 
power  sites,  and  other  public  and  private  properties, 
with  the  determined  purpose  that  they  are  there  to 
stay  in  spite  of  the  nominal  transfer  of  the  leased 


200  THE  SHANTUNG  QUESTION 

territory  to  be  effected  in  the  near  future.  They  have 
flooded  the  province  with  Japanese  drugs  and  demi- 
monde, brought  in  by  Japanese  vessels  running 
directly  between  Japan  and  Tsingtao.  Japanese 
merchants  and  traders  are  everywhere  in  evidence, 
and  with  the  backing  of  their  Government  and  per- 
haps the  leading  financial  institutions  in  Japan,  they 
have  made  the  most  of  their  opportunities.  The 
American  Consul  at  Tsingtao  observes  that  "the  use 
made  by  Japanese  merchants  of  the  opportunities 
presented  to  them  resembles  the  throwing  open  of  an 
Indian  reservation  to  settlement."  And  an  English 
writer  on  the  Far  Eastern  affairs,  by  no  means 
unfriendly  to  Japan,  has  given  the  following  impres- 
sion of  Japanese  activities  in  Shantung,  after  a  visit 
to  the  capital  of  the  province:  "And  everywhere  in 
the  thronged  streets,  amidst  the  goodly  trees  and 
solid  buildings  that  remind  us  of  Teutons  departed, 
were  the  sons  of  Dai  Nippon,  civilian  agents  and 
harbingers  of  'peaceful  penetration,'  more  easily  to 
be  recognised  here  (in  Tsinanfu)  by  their  short 
stature  than  farther  south.  They  hold  themselves 
discreetly,  yet  with  dignity,  as  if  conscious  alike  of 
their  isolation  and  of  the  greatness  of  the  Island 
Empire  behind  them.  And  as  a  reminder  of  that 
greatness,  to  gladden  their  hearts,  there  were  brisk- 
stepping  companies  of  Japanese  soldiers,  detach- 
ments of  the  troops  whose  vanguard  duty  it  is  to 
'protect'  a  Chinese  railway  on  Chinese  soil." 

An  American  writer,  describing  the  process  of 
Japan's  penetration  of  Shantung  "as  seen  from 
within"  gave  the  typical  case  of  Po-shan  mines. 
"Po-shan  is  an  interior  mining  village.  The  mines 


JAPAN'S  PEACEFUL  PENETRATION  201 

were  not  a  part  of  the  German  booty;  they  were 
Chinese  owned.  The  Germans,  whatever  their  ulte- 
rior aims,  had  made  rib  attempt  at  dispossessing  the 
Chinese.  The  mines,  however,  are  at  the  end  of  a 
branch  line  of  the  new  Japanese  owned  railway — 
owned  by  the  Government,  not  by  a  private  corpora- 
tion, and  guarded  by  Japanese  soldiers.  Of  the  forty 
mines  (at  Po-shan),  the  Japanese  have  worked  their 
way,  in  only  four  years,  into  all  but  four.  Different 
methods  are  used.  The  simplest  is,  of  course,  dis- 
crimination in  the  use  of  the  railway  for  shipping. 
Downright  refusal  to  furnish  cars  while  competitors 
who  accepted  Japanese  partners  got  them,  is  one 
method.  Another  more  elaborate  method  is  to  send 
but  one  car  when  a  large  number  is  asked  for,  and 
then  when  it  is  too  late  to  use  cars,  send  the  whole 
number  asked  for  or  even  more,  and  then  charge  a 
large  sum  for  demurrage  in  spite  of  the  fact  the  mine 
no  longer  wants  them  or  has  cancelled  the  order. 
Redress  there  is  none/' 

The  same  writer  went  on  to  describe  what  may  be 
called  "the  process  of  dispossession"  resorted  to  by 
the  Japanese  in  Shantung.  "Tsinan  has  no  special 
foreign  concessions.  It  is,  however,  a  ' treaty  port' 
where  nationals  of  all  foreign  Powers  can  do  busi- 
ness. But  Po-shan  is  not  even  a  treaty  port. 
Legally  speaking,  no  foreigner  can  lease  land  or  carry 
on  any  business  there.  Yet  the  Japanese  have  forced 
a  settlement  as  large  in  area  as  the  entire  foreign 
settlement  in  the  much  larger  town  in  Tsinan.  A 
Chinese  refused  to  lease  land  where  the  Japanese 
wished  to  relocate  their  railway  station.  Nothing 
happened  to  him  directly.  But  merchants  could  not 


202  THE  SHANTUNG  QUESTION 

get  shipping  space,  or  receive  goods  by  rail.  Some  of 
them  were  beaten  up  by  thugs.  After  a  time,  they 
used  their  influence  with  their  compatriot  to  lease  his 
land.  Immediately  the  persecution  ceased." 

The  incident  seems  incredible  at  first  sight.  It  is, 
however,  all  true,  for  it  is  nothing  but  a  statement  of 
the  actual  conditions  which  have  existed  in  Shantung 
for  the  last  seven  years.  Professor  John  Dewey,  the 
author  of  the  statement,  visited  Shantung  a  number 
of  times  and  he  was  the  eye-witness  of  the  sinister 
process.  His  veracity  cannot  be  gainsaid. 

The  commercial  activity  of  the  Japanese  in  Shan- 
tung is  manifold.  To  give  but  a  few  typical  instances, 
we  may  mention  The  Oriental  Salt  Company,  which 
was  established  on  March  31,  1918,  as  a  Chino-Jap- 
anese  joint  concern,  with  the  right  to  use  3,000  acres 
of  land  in  Yintao  in  the  Kiaochow  Bay  as  a  salt  field ; 
the  taking  over  of  the  German  Brewery  at  Tsingtao 
by  Japanese  brewers  who  have  flooded  Shanghai, 
Tien-tsin,  and  other  commercial  ports  in  China,  with 
Japanese  beer;  the  establishment  of  a  Chino- Jap- 
anese Fishery,  with  10,000,000  yen  as  its  capital,  and 
with  Tsingtao,  Hulutao,  Changku,  and  Hsinho  as  the 
fishing  area ;  and  the  organisation  of  a  special  trans- 
portation system  on  the  Kiaochow-Tsinan  Railway 
and  its  branches,  including  preferential  rates,  rebates, 
and  other  features  which  have  long  characterised  the 
system  of  transportation  on  the  South  Manchurian 
Railway.  The  following  extract  from  an  article 
which  Mr.  Willys  R.  Peck,  formerly  American  Con- 
sul at  Tsingtao,  wrote  for  the  Commercial  Handbook 
of  China,  attests  to  the  Japanese  activities  in  the 
province.  He  said: 


JAPAN'S  PEACEFUL  PENETRATION  203 

''Japanese  capitalists  seem  to  be  inaugurating  a  vigorous 
development  of  the  manufacturing  possibilities  in  Tsingtao,  .  .  . 
raw  materials  for  such  enterprises  being  obtainable  both  cheaply 
and  abundantly  in  the  hinterland  of  the  leased  territory  of 
Kiaochow.  An  additional  development  in  the  near  future  will 
probably  be  iron  works,  using  ore  from  the  mines  at  Chinling- 
chen,  180  miles  from  Tsingtao,  on  the  Shantung  Railway. 
Plants  for  the  reduction  of  this  ore  had  been  projected  by  the 
Germans  at  Tsangkow,  11  miles  from  Tsingtao.  Since  the  Jap- 
anese occupation  of  the  leased  territory  of  Kiaochow,  the  fol- 
lowing enterprises  (among  others),  with  an  aggregate  authorised 
capital  of  $3,000,000,  not  including  capital  of  parent  firms,  have 
opened  establishments  at  Tsingtao :  Flour  mill,  oil  mills,  silk  fila- 
ture, spinning  mill,  ice  factory,  rice  mill,  tanneries,  match  fac- 
tory, egg-products  factories,  chemical  factory,  soap  factory, 
smelting  works,  and  cannery.  These  factories  are  located  conven- 
iently with  respect  to  shipping." 

The  most  typical  instance  of  Japan's  peaceful 
penetration,  which  appears  to  be  irresistible,  is  the 
gradual  process  of  absorption  of  the  small  trades  in 
the  province.  Take,  for  example,  the  peanut  trade  in 
Shantung :  for  years  and  years,  it  has  proved  a  pros- 
perous trade  which  the  natives  of  the  province  have 
considered  as  a  sure  means  of  earning  a  livelihood. 
Though  not  counted  among  the  important  industries, 
the  growing  of  peanuts  and  the  extraction  of  peanut 
oil  has  promised  to  thousands  and  thousands  of  peo- 
ple enough  yearly  income  to  save  them  from  the  path 
of  starvation.  The  nuts,  both  shelled  and  unshelled, 
as  well  as  the  oil,  are  mainly  imported  into  the  United 
States.  In  1920,  no  less  than  132,412,423  pounds  of 
peanuts  were  imported  by  the  United  States,  most  of 
which,  it  has  been  pointed  out,  were  grown  in  China. 
In  the  same  year,  170,160,367  pounds  of  peanut  oil 
were  imported  by  the  United  States,  which  called  for 
the  crushing  of  an  even  larger  volume  of  peanuts 


204  THE  SHANTUNG  QUESTION 

abroad.  For  the  fiscal  year  1920-1921  imports  of 
peanuts  totalled  47,989,230  pounds  and  peanut  oil 
18,676,191  pounds.  While  it  is  undoubtedly  true  that 
most  of  the  peanuts  imported  by  the  United  States, 
are  grown  in  China,  it  is  also  true  that  the  peanut 
trade  has  been  gradually  taken  over  by  the  Japanese 
who,  with  larger  capital  at  their  disposal,  are  always 
in  the  position  to  buy  out  the  small  " peanut  farmers" 
in  Shantung.  Bead  the  following  extract  from  a 
bulletin  issued  by  the  Bureau  of  Markets  and  Crop 
Estimates  of  the  United  States  Department  of  Agri- 
culture, to  be  convinced  of  the  real  character  of 
Japanese  peaceful  penetration: 


"For  a  number  of  years  China  has  produced  the  bulk  of 
the  peanuts  imported  into  the  United  States.  Shantung  is  the 
leading  peanut  producing  region  in  China,  as  its  soil  is  particu- 
larly adapted  to  the  growing  of  peanuts.  The  nut  grown  in  that 
province  is  said  to  be  larger  than  that  grown  in  any  other  part 
of  China,  and  contains  more  oil.  The  Provinces  of  Honan  and 
Chihli  rank  next  to  Shantung  in  the  production  of  peanuts.  Pea- 
nut 'farms'  in  Shantung  are  small  plats  of  ground,  often  not 
over  two  acres  in  area.  Yet  from  the  produce  of  small  plats 
like  this  a  Chinese  farmer  secures  a  living  not  only  for  himself 
and  family,  but  occasionally  gives  his  sons  a  college  education. 
This  is  all  the  more  remarkable  in  that  most  Chinese  farmers  use 
only  primitive  methods  of  cultivation. 

' '  The  peanut  business  in  Shantung  has  largely  been  taken  over 
by  the  Japanese  as  the  successors  of  the  Germans.  Japanese 
traders  at  Tsingtao  annually  export  large  quantities  of  peanuts 
and  peanut  oil  to  the  United  States  by  way  of  Kobe  and  other 
Japanese  ports.  Kobe  has  consequently  come  to  be  considered 
one  of  the  leading  peanut  and  peanut  oil  markets  of  the  Far 
East.  Japan  exports  some  peanuts,  but  the  greater  portion  of 
the  nuts  tabulated  by  the  United  States  customs  officials  as 
coming  from  Japan  are  actually  produced  in  China.  American 
consular  officials  in  China  have  reported  that  transpacific  freight 
rates  in  the  past  have  been  such  that  nuts  could  be  shipped  from 


JAPAN'S  PEACEFUL  PENETRATION  205 

Tsingtao  to  Kobe,  Japan,  or  to  Dairen,  Manchuria,  and  thence 
to  the  United  States  at  lower  rates  than  by  shipping  directly 
from  Tsingtao.  Considerable  quantities  of  peanuts  are  also 
imported  from  Hongkong,  but  these,  too,  are  mostly  grown  in 
China.  During  the  fiscal  year  ending  June  30,  1920,  China, 
Japan  and  Hongkong  shipped  120,042,879  pounds  of  our  total 
import  of  132,412,423  pounds.  One  of  the  significant  features 
of  the  peanut  trade  during  that  year  was  the  large  importation 
from  the  Dutch  East  Indies,  principally  Java,  whence  5,824,644 
pounds  were  received.  Java  nuts  are  said  to  be  heavier  and 
more  oily  than  the  Chinese  product. " 

Another  instance  is  the  control  of  the  manufacture 
of  salt — one  of  the  ambitious  schemes  that  the 
Japanese  military  and  civil  authorities  in  Shantung 
have  cherished  and  realised. 

The  manufacture  of  salt  has  been,  for  centuries, 
one  of  the  important  industries  among  the  natives  of 
the  province.  In  fact,  from  very  ancient  time,  Shan- 
tung has  been  noted  as  the  largest  salt-producing 
province  in  China.  The  best  known  district  wherein 
the  manufacture  of  salt  has  been  carried  on  on  a  large 
scale  is  the  region  along  the  mouth  of  the  Yellow 
River  and  the  region  which  surrounds  the  Kiaochow 
Bay.  When  Germany  leased  the  territory  for  a 
period  of  ninety-nine  years,  she  acquired  within  the 
leased  area  some  salt  works  along  the  ocean  front 
around  the  promontory  to  the  north  of  the  famous 
bathing  beach  in  Tsingtao.  The  question  at  once 
arose  as  to  whether  or  not  salt  produced  in  the  Ger- 
man leased  area  should  be  sent  into  Chinese  territory 
and  the  interior  of  the  province,  free  of  duty,  or  dis- 
posed of  along  the  coast.  An  equitable  plan  was  later 
worked  out  and  agreed  upon,  that  all  salt  shipped 
from  Tsingtao  to  other  ports  along  the  China  coast 
was  to  be  officially  stamped  and  accounted  for,  and 


206  THE  SHANTUNG  QUESTION 

four-fifths  of  the  profits  from  its  sale  was  to  be 
turned  over  to  the  Chinese  salt  administration.  It 
was  also  agreed  that  no  salt — no  " foreign"  salt, 
whether  produced  in  the  leased  area  or  brought  from 
foreign  countries — was  to  be  brought  in  through 
Tsingtao  to  be  sent  into  the  interior,  and  no  Chinese 
salt,  with  tax  yet  unpaid,  was  to  be  shipped  out 
through  Tsingtao.  This  agreement  was  in  accord- 
ance with  the  regulations  of  China's  Salt  Adminis- 
tration, which  prohibit  the  export  of  salt  made  in 
China  to  escape  tax  and  forbid  the  import  of  foreign 
cheap  salt  to  compete  with  the  Chinese  taxed  salt. 

To  the  Japanese,  who  swarmed  in  the  Shantung 
province  after  the  Germans  had  been  driven  out,  the 
possibilities  of  salt  business  looked  unusually  attrac- 
tive. Early  in  1915,  they  formed  their  connections 
with  the  salt  producers  and  dealers  inside  and  outside 
of  the  leased  territory,  and  by  the  beginning  of  1916 
the  salt  industry  in  the  Kiaochow  Bay  regions  fell 
practically  into  Japanese  hands. 

There  are  a  few  aspects  of  this  question  apropos  of 
Japan's  attempt  at  salt  monopoly  in  Shantung.  The 
first  is  the  taking  over  of  the  salt  fields  by  the 
Japanese.  There  has  been  a  marked  decline  of  the 
salt  manufacture  among  the  Chinese  salt  farmers  of 
the  coastal  districts,  where  nearly  all  salt  fields  have 
either  been  commandeered  or  purchased  by  the 
Japanese  at  a  very  low  price.  The  result  is  that, 
during  the  last  few  years,  the  revenue  of  the  province, 
of  which  salt  tax  forms  a  substantial  part,  has 
dwindled  and  serious  losses  have  been  sustained  by 
the  natives  who,  because  of  lack  of  ample  funds,  have 
not  been  able  to  compete  successfully  with  the 


JAPAN'S  PEACEFUL  PENETRATION  207 

Japanese  salt  companies  in  Kiaochow  and  Tsingtao. 
In  1920,  about  400,000,000  catties  of  salt  were  sold  by 
the  Japanese  in  Chinese  markets,  with  a  profit 
estimated  at  20,000,000  yen. 

This  leads  to  another  aspect  of  the  question.  This 
huge  profit  is  possible  because  of  the  notorious  fact 
that  no  tax  is  paid  on  Japanese  salt — a  fact  which  at 
once  explains  why  the  revenue  of  the  province  has 
greatly  dwindled.  The  Japanese  have  been  openly 
shipping  Kiaochow  Bay  salt  into  the  interior  of  the 
province  as  far  as  Tsinanfu  by  means  of  the  Kiao- 
ehow-Tsinanfu  Railway,  which  has  been  under  their 
control,  paying  no  duty  whatever.  This  is  obviously 
in  violation  of  the  regulations  of  China's  salt  admin- 
istration, and  highly  detrimental  to  the  interests  of 
the  native  salt  farmers  who,  as  they  are  heavily  taxed, 
are  in  no  position  to  compete.  The  result  is  that  the 
provincial  government  of  Shantung  has  been  de- 
prived of  many  hundreds  of  thousands  of  dollars 
worth  of  salt  tax  every  year. 

An  additional  phase  of  the  salt  question  is  that, 
contrary  to  the  original  understanding  which  the 
Germans  had  faithfully  observed  during  their  days  in 
Kiaochow,  and  contrary  to  the  regulations  of  the  Salt 
Administration  of  China,  untaxed  salt  raised  in  the 
interior  of  the  province  along  the  mouth  of  the  Yel- 
low River  has  been  systematically  brought  over  the 
Shantung  railway  by  the  Japanese  dealers  and 
shipped  out  of  the  port  of  Tsingtao.  Not  infre- 
quently, the  salt  thus  exported  is  shipped  back  to 
Tsingtao  and  distributed  in  the  interior  free  of  duty. 

At  the  Washington  Conference,  where  "  conversa- 
tions" were  held  on  the  Shantung  question,  Japan's 


208  THE  SHANTUNG  QUESTION 

seizure  of  the  Chinese  salt  industry  was  a  subject  of 
great  importance  and  frequently  discussed.  As  a 
solution  of  the  problem,  it  was  suggested  that  "the 
Chinese  Government  would  take  over  the  industry, 
with  compensation  to  the  Japanese  nationals  who  had 
become  interested  in  it,  and  with  provision  for  the 
export  of  a  certain  amount  of  salt  to  Japan" — a 
solution  which,  it  was  pointed  out,  "would  meet  all 
the  legitimate  interests  of  the  Japanese  and,  at  the 
same  time,  conform  to  the  Chinese  policy  of  treating 
salt  as  a  Government  monopoly."  The  Japanese 
delegates,  while  declining  to  give  a  definite  figure  as 
to  the  amount  of  salt  to  be  yearly  exported  to  Japan, 
insisted  that  the  salt  industry  in  Shantung,  con- 
ducted by  the  Japanese,  should  not  be  interfered  with, 
so  that  the  export  of  salt  would  not  be  interrupted. 
At  the  thirty-first  meeting  of  the  Chino-Japanese 
"conversations,"  held  on  January  23,  1922,  Baron 
Shidehara  said:  "The  Japanese  Government  desired 
that  all  the  salt  interests  should  be  retained  in 
Japanese  hands."  This  desire  was,  however,  not 
insisted  upon.  After  much  deliberation,  the  Chinese 
and  the  Japanese  reached  this  solution,  which  was 
finally  embodied  in  the  Shantung  Agreement: 
"Whereas  the  salt  industry  is  a  Government  monop- 
oly in  China,  it  is  agreed  that  the  interests  of  Jap- 
anese subjects  or  Japanese  companies  actually  en- 
gaged in  the  said  industry  along  the  coast  of  Kiao- 
chow  Bay  shall  be  purchased  by  the  Government  of 
the  Chinese  Republic  for  fair  compensation,  and  that 
the  exportation  to  Japan  of  a  quantity  of  salt  pro- 
duced by  such  industry  along  the  said  coast  is  to  be 
permitted  on  reasonable  terms. ' '  The  details  incident 


JAPAN'S  PEACEFUL  PENETRATION  209 

to  the  transfer  of  the  industry  are  left  to  the  Joint 
Commission  to  be  appointed  by  Japan  and  China. 

Of  all  the  weapons  of  economic  penetration  which 
Japan  has  had  at  her  disposal  in  Shantung,  none  has 
proved  to  be  of  such  usefulness  to  her  as  the  numerous 
post  offices  which  she  has  maintained  in  the  province. 
For  the  last  fifty  or  sixty  years,  foreign  post  offices 
or  postal  agencies  have  been  established  in  the  prin- 
cipal treaty  ports  in  China.  The  opening  of  these 
establishments  was  not  based  upon  any  treaty  pro- 
vision, but  tolerated  by  the  Chinese  Government,  for 
the  reason  that  China  had  not,  during  the  early  eigh- 
ties, a  postal  system  of  her  own.  In  1896,  a  Chinese 
postal  system  was  organised  under  the  auspices  of  the 
Chinese  Maritime  Customs.  In  1911,  a  postal  depart- 
ment was  created,  placed  under  the  Ministry  of 
Communication,  and  entirely  detached  from  the  Cus- 
toms Service.  In  1914,  China  joined  the  Universal 
Postal  Union.  And  to-day,  the  Chinese  Post  Office 
functions  more  efficiently  than  those  foreign  postal 
establishments  in  China — a  fact  which  is  generally 
admitted  by  all  the  foreign  residents  in  the  Par  East. 
In  spite  of  this  proved  efficiency  on  the  part  of  the 
Chinese  Post  Office,  the  foreign  Powers  have  con- 
tinued to  maintain  their  establishments  in  the  treaty 
ports.  For  the  last  few  years,  the  foreign  postal 
establishments  have  been  steadily  increasing  instead 
of  decreasing,  and  this  steady  increase  is  confined 
exclusively  to  Japanese  Offices.  Without  taking  into 
consideration  the  numerous  establishments  which 
Japan  has  maintained  in  Manchuria  and  Mongolia, 
Fukien  and  other  parts  of  China,  we  need  refer  to 
her  postal  agencies  in  the  Shantung  province  alone. 


210  THE  SHANTUNG  QUESTION 

Military  field  post  offices  were  established  during  the 
attack  upon  Tsingtao,  which,  after  the  cessation  of 
hostilities,  were  converted  into  regular  Japanese  post 
offices.  We  have  to-day  in  the  entire  province  no 
less  than  twenty-three  Japanese  post  offices  and 
agencies.* 

How  these  postal  establishments  have  been  made 
use  of  is  a  story  that  shows  Japanese  penetration 
clearly  at  work.  Japan  had  at  first  claimed  that 
owing  to  military  requirements  she  had  to  have  field 
offices  to  handle  the  Japanese  mails.  When  this 
excuse  could  not  longer  hold  good  with  the  conclusion 
of  the  war,  she  claimed  that  they  should  be  made  into 
regular  offices  to  handle  the  mails  for  Japanese  resi- 
dents in  the  leased  territory.  On  March  26,  1917,  an 
agreement  was  concluded,  fixing  the  provisional 
procedure  concerning  Chino-Japanese  postal  and 
telegraphic  operations  in  the  leased  territory  of 
Kiaochow  and  along  the  Kiaochow-Tsinan  Railway. 
In  return  for  the  right  "to  continue  to  open  one  Post 
Office  and  Telegraph  Office  at  Tsingtao,"  Japan  was 
"to  continue  to  open  one  Post  Office  within  each  of 
the  railway  station  zones  at  Tsinan  and  Wei-hsien 
along  the  Kiao-Tsi  Railway."  When  it  was  discov- 
ered that  Japanese  merchants  and  soldiers  were 
scattered  all  over  the  province,  this  fact  was  seized 
as  an  excuse  for  providing  further  "postal  facilities" 
for  them.  The  result  is  that  to-day  Japanese  postal 


*  There  are  at  Cheef  oo  one  post  office  and  three  letter  offices ;  at  Tsinan, 
one  post  office,  three  letter  offices,  two  box  offices ;  at  Changtien,  one  military 
field  post  office;  at  Wei-hsien,  Fangtze,  Kaomi,  Tsingchowfu,  Poshan,  one 
post  office  each;  at  Hungshan  and  Kiaochow,  one  post  office  and  one  box 
office  each;  and  at  Chowtsun,  three  letter  offices. 

Alien  postal  agencies  in  China  there  are  at  present  150  altogether.  The 
United  States  has  1;  France,  13;  Great  Britain,  12,  and  Japan,  124. 


JAPAN'S  PEACEFUL  PENETRATION     211 

establishments  along  the  entire  Kiaochow-Tsinan 
Railway  are  ubiquitous.  The  Japanese  have  made 
use  of  them,  not  only  as  merely  postal  agencies 
through  which  mails  to  or  from  Japan  are  handled, 
but  also  as  safe  channels  through  which  smuggling 
on  a  large  scale  of  narcotic  drugs  has  been  carried  on. 
It  is  important  to  remember  that  Japanese  post  offices 
and  agencies  in  Shantung  are  not  subject  to  the  super- 
vision of  the  Chinese  Customs  Service,  and  while 
Chinese  authorities  are  supposed  to  have  the  right 
to  inspect  all  incoming  mails  from  abroad,  this  right 
has  never  been  insisted  upon  with  Japanese  mails. 
Taking  advantage  of  this  generous  treatment,  Jap- 
anese postal  establishments  in  Shantung  have  lent 
themselves  to  the  carrying  on  of  illicit  traffic.  It 
should  also  be  noted  that,  aside  from  the  sinister  use 
made  of  them,  the  presence  of  such  large  numbers  of 
Japanese  postal  agencies  in  the  province  deprives 
China  of  a  large  amount  of  legitimate  revenue,  vio- 
lates her  administrative  entity,  and  hampers  the 
working  of  the  Chinese  post  offices.  Fortunately,  the 
general  agreement  reached  at  the  Washington  Con- 
ference to  abolish  foreign  post  offices  in  China  may 
hasten  the  day  when  this  obnoxious  practice  becomes 
a  thing  of  the  past. 

Enough  has  been  said  to  show  that  the  picture  of 
"  Shantung  as  seen  from  within "  is  not  a  pleasant 
one.  The  Japanese  have  penetrated  so  far  and  so 
deeply  that,  even  after  they  have  departed,  their  foot- 
prints will  still  remain  visible.  Much  is  to  be  trusted 
to  the  Shantung  Agreement,  reached  at  the  Wash- 
ington Conference,  to  get  the  Japanese  out  of  the 
province,  bag  and  baggage.  Much  more  is  to  be 


212  THE  SHANTUNG  QUESTION 

trusted  to  the  patience  and  industry  of  the  Chinese 
people  themselves  to  obliterate  those  traces  of  foreign 
aggression  and  to  make  the  Shantung  province  an 
unstained  spot  on  the  map  of  China. 


XVII 

ATTEMPTS  AT  DIRECT  NEGOTIATION 

ALMOST  immediately  upon  the  coming  into 
force  of  the  Versailles  Treaty  of  Peace  with 
Germany,  Japan  approached  the  Peking 
Government  to  open  negotiations  for  the  restitution 
of  the  Shantung  province.  Taking  the  ground  that 
her  declaration  of  war  upon  Germany  on  August  14, 
1917,  abrogated  the  Convention  of  March  6, 1898,  and 
that  her  refusal  to  sign  the  Versailles  Treaty  of 
Peace  freed  her  from  any  obligation  to  recognise  the 
terms  of  the  Shantung  settlement  therein  embodied, 
China  declined  direct  negotiation  on  any  basis  other 
than  unconditional  restoration.  At  the  same  time, 
the  sentiment  of  the  Chinese  people  was  strongly 
opposed  to  negotiation  between  Peking  and  Tokio, 
fearing  that  China  would  be  sadly  worsted  in  any 
diplomatic  tussle  with  her  ambitious  neighbour.  If 
Japan  were  sincere  in  her  profession  for  the  restora- 
tion of  the  Shantung  province,  for  the  withdrawal  of 
her  troops  and  police,  and  for  the  return  of  the  Ger- 
man interests  and  properties,  all  this,  it  was  argued, 
could  be  done  without  negotiation.  The  way  to 
restore  was  to  restore,  and  the  way  to  withdraw  was 
to  withdraw.  It  was  strongly  believed  that  Japan's 
real  object  in  attempting  to  bring  about  direct  nego- 
tiation with  Peking  was  to  drive  a  hard  bargain  with 

213 


214  THE  SHANTUNG  QUESTION 

China  for  the  nominal  restitution  of  the  Shantung 
province. 

The   early  attempts   at   direct  negotiation  were 
revealed  in  an  official  statement,  which  the  Japanese 
Foreign  Office  had  issued  on  June  16,  1920,  embody- 
ing correspondence  passed  between  the  Governments 
in  Peking  and  Tokio.     This  correspondence  shows 
that  in  January,  1920,  upon  the  coming  into  force  of 
the   Versailles   Treaty,   the   Japanese    Minister   in 
Peking  attempted,  under  instructions  from  Tokio,  to 
bring  about  negotiations  with  the  Chinese  Govern- 
ment for  the  disposition  of  the  Shantung  question. 
In  its  note  of  January  19,  the  Japanese  Government 
expressed  its  desire  "to  effect  a  speedy  solution  of 
the  entire  question "  and  undertook  "to  withdraw  its 
troops  as  speedily  as  possible."     For  almost  three 
months,  the  Chinese  Government  remained  adamant. 
On   April   26,   the    Japanese   Minister   was    again 
instructed  to  urge  the  Chinese  Government  to  com- 
mence negotiation.    On  May  22,  the  Chinese  Govern- 
ment replied,  saying  that  as  China  was  not  a  party  to 
the  Versailles  Treaty,  on  the  strength  of  which  Japan 
now  claimed  to  succeed  to  the  German  rights  and  con- 
cessions in  Shantung,  the  Chinese  Government  was 
not  in  a  position  to  begin  direct  negotiation  with  the 
Japanese  Government  on  the  subject.    On  June  J4, 
the  Japanese  Government  replied,  declaring  that  "a 
fundamental   agreement, "   meaning   the    Shantung 
treaty  of  1915  growing  out  of  the  Twenty-one  De- 
mands,  had   already   existed   between   Japan   and 
China  as  to  the  disposition  of  the  leased  territory  in 
Shantung,    and   that   Japan   could   not,   therefore, 
understand  China's  refusal  to  begin  direct  negotia- 


ATTEMPTS  AT  DIRECT  NEGOTIATION        215 

tion,  which  was  necessary  for  the  restoration  of  Kiao- 
chow  and  for  the  settlement  of  incidental  details.  The 
Japanese  Government,  annoyed  by  the  indifferent 
and  immovable  attitude  on  the  part  of  China,  issued, 
contrary  to  its  usual  secretive  policy,  the  following 
statement,  with  the  obvious  intention  of  placing  upon 
China  the  responsibility  of  delaying  the  settlement  of 
the  Shantung  question.  The  statement,  together 
with  the  correspondence  in  full,  reads  as  follows : 

When  the  treaty  of  peace  became  effective  in  January,  the 
German  rights  and  interests  in  Shantung  passed  into  the  posses- 
sion of  Japan  by  virtue  of  the  provisions  of  the  pact.  The  Jap- 
anese Government,  in  accordance  with  repeated  declarations  and 
pledges,  and  with  a  desire  and  intention  to  effect  a  restoration 
of  Kiaochow  to  China  and  to  settle  matters  incidental  thereto, 
instructed  the  Japanese  Minister  at  Peking  to  inform  the 
Chinese  Government  as  follows : 


JAPANESE  NOTE,  JANUARY  19,  1920 

"First — That  the  Japanese  Government,  desiring  to  open 
negotiations  with  China  relative  to  the  restoration  of  Kiaochow 
and  the  settlement  of  details  incidental  thereto,  and  hoping  thus 
to  effect  a  speedy  solution  of  the  entire  question,  expresses  the 
hope  that  the  Chinese  Government  will  make  the  necessary 
preparations  for  negotiations. 

1 '  Second — That  it  is  the  intention  of  the  Japanese  Government 
to  withdraw  its  troops  from  along  the  Shantung  Railway  as  a 
matter  of  course  upon  agreement  between  the  two  governments 
regarding  the  disposition  of  Kiaochow.  In  fact,  the  Japanese 
Government  wishes  to  withdraw  its  troops  as  speedily  as  possible, 
even  before  an  agreement  is  entered  into,  but,  in  the  absence  of 
any  competent  force  to  assume  the  duty  of  guarding  the  railway 
after  evacuation,  it  is  constrained  to  keep  those  troops  tempo- 
rarily stationed  there  to  insure  the  security  of  communications 
and  safeguard  the  interests  of  Japan  and  China,  who  are  copart- 
ners in  a  joint  enterprise/' 


216  THE  SHANTUNG  QUESTION 

The  Japanese  Government,  therefore,  hoped  that  the  Chinese 
Government,  appreciating  the  intentions  of  Japan,  would 
promptly  organise  a  police  force  to  replace  Japanese  troops 
guarding  the  railway,  even  before  agreement  was  reached  as  to 
other  details.  The  Japanese  Government  was  fully  prepared  to 
proceed  with  negotiations  to  carry  out  its  pledges,  but  nearly 
three  months  passed  without  a  reply.  It  is  a  source  of  deepest 
regret  that  at  a  time  when  all  nations  of  the  world  are  making 
efforts  for  the  establishment  of  enduring  peace,  questions  of 
importance  remain  unsettled  between  Japan  and  China. 

The  Japanese  Government,  being  all  the  more  desirous  of 
speedily  settling  the  matter  for  the  mutual  benefit  of  the  two 
countries,  instructed  the  Japanese  Minister  in  Peking,  on  April 
26,  to  urge  upon  the  Chinese  Government  the  importance  of 
taking  the  necessary  steps. 

It  was  not  until  May  22  that  the  Chinese  Government  replied 
to  this  request  of  the  Japanese  Government.  The  reply  was  in 
the  nature  of  a  request  for  delay,  the  Chinese  Government 
saying : 


CHINESE  REPLY,  MAY  22,  1920 

1  'The  Chinese  Government  fully  appreciates  the  intention  of 
Japan  to  prepare  for  the  evacuation  of  troops  along  the  Kiao- 
chow  Railway,  which  is  incidental  to  carrying  out  the  terms  of 
the  Treaty  of  Peace.  China,  however,  did  not  sign  that  treaty, 
and  is  not  in  a  position  to  negotiate  directly  with  Japan  on  the 
question  of  Kiaochow.  Furthermore,  the  people  throughout 
China  have  assumed  an  indignantly  antagonistic  attitude  toward 
the  question.  For  these  reasons,  and  also  in  consideration  of 
the  amity  existing  between  Japan  and  China,  the  Chinese  Gov- 
ernment does  not  find  itself  in  a  position  to  reply  at  this  moment. 

"On  the  other  hand,  the  state  of  war  with  Germany  having 
ceased  to  exist,  all  Japanese  military  establishments  within  and 
without  the  leased  territory  of  Kiaochow  are  unnecessary,  and 
the  restoration  of  pre-war  conditions  is  heartily  desired  by 
the  Chinese  Government.  The  people  of  China  propose  to  effect 
a  proper  organisation  to  replace  Japanese  troops  in  order  to 
secure  and  maintain  the  safety  of  the  whole  line.  However,  as 
this  is  independent  entirely  of  the  question  of  restoration  of 


ATTEMPTS  AT  DIRECT  NEGOTIATION        217 

Kiaochow,  the  Chinese  Government  trusts  Japan  will  not  delay 
the  execution  of  the  order  for  evacuation." 

Upon  receipt  of  this  reply  the  Imperial  Government  of  Japan 
addressed  (on  June  14,  1920),  a  note  to  the  Chinese  Government 
urging  reconsideration.  This  memorandum  reads: 

JAPANESE  NOTE,  JUNE  14,  1920 

"In  its  note  the  Chinese  Government  stated  that  it  did  not 
find  itself  in  a  position  to  meet  promptly  the  request  of  Japan 
for  the  opening  of  negotiations  looking  to  an  adjustment  of 
questions,  arrangements  for  which  were  provided  for  in  the 
Treaty  of  Peace  with  Germany.  This  stand  on  the  part  of  the 
Chinese  Government  was  taken  because  of  the  importance  which 
it  attaches  to  relations  between  Japan  and  China,  because  China 
has  not  signed  the  Treaty  of  Peace  with  Germany,  and,  further, 
because  the  people  of  China  are  indignant. 

"The  Japanese  Government,  however,  would  point  out  that 
a  fundamental  agreement  exists  between  China  and  Japan  as 
to  the  disposition  of  the  leased  territory  of  Kiaochow.  Repeated 
declarations  of  the  Imperial  Japanese  Government  leave  no  room 
for  doubt  as  to  the  singleness  of  purpose  with  which  Japan  seeks 
at  the  earliest  date  a  fair  and  just  settlement  of  the  question. 
The  Imperial  Japanese  Government,  therefore,  fails  to  under- 
stand the  contention  of  the  Chinese  Government  that  it  does  not 
find  it  convenient  to  negotiate  directly. 

"  It  is  a  plain  and  positive  fact  that  all  the  rights  and  interests 
that  Germany  formerly  possessed  in  Shantung  have  been  trans- 
ferred to  Japan  in  accordance  with  the  Treaty  of  Peace.  Since 
the  Chinese  Government  had  consented  previously  to  the  trans- 
fer of  those  rights  and  interests,  they  have  rightly  come  into 
the  possession  of  Japan.  It  follows  naturally,  therefore,  that 
these  rights  cannot  be  affected  in  any  way  by  the  refusal  of  the 
Chinese  Government  to  sign  the  Treaty  of  Peace. 

"Immediately  upon  the  coming  into  force  of  the  Treaty  of 
Peace  with  Germany,  the  Japanese  Government,  in  accordance 
with  its  past-repeated  declarations  and  pledges,  proposed  to  the 
Chinese  Government  that  negotiations  be  opened  with  a  view 
to  restoration  of  rights  and  interests  in  Shantung  under  the 
understanding  reached  in  Paris,  and  that  they  also  enter  negotia- 
tions over  matters  in  connection  with  the  restoration  of  territory 
formerly  leased  to  Germany. 


218  THE  SHANTUNG  QUESTION 

"The  Japanese  Government  had  hoped  the  Chinese  Govern- 
ment would  respond  readily  to  the  proposal  not  to  hesitate  to 
open  the  way  for  the  Japanese  Government  to  demonstrate  by 
concrete  actions  its  policy  of  fairness  and  justice  toward  China. 

*  *  Contrary  to  expectations,  however,  the  Chinese  Government, 
after  a  delay  of  several  months,  replied  that  it  did  not  find  it 
advisable  to  negotiate,  giving  the  reasons  above  stated.  It  is 
hardly  necessary  to  point  out,  therefore,  where  rests  the  responsi- 
bility for  delaying  the  settlement  of  the  Shantung  question. 
The  Imperial  Japanese  Government,  however,  always  consider- 
ing the  amity  between  Japan  and  China,  hereby  reiterates  its 
declaration  that  it  will  accept  a  proposal  for  negotiations  at 
any  time  considered  agreeable  to  the  Chinese  Government. 

"In  connection  with  the  railway  guard  along  the  Shantung 
railways,  the  Japanese  Government  refers  to  its  note  of  January 
19,  containing  the  statement  of  its  intention  to  withdraw  Jap- 
anese troops  at  once,  even  before  the  conclusion  of  negotiations, 
if  the  Chinese  police  force  is  made  competent  to  take  over  the 
responsibility  of  guarding  mutual  interests. 

"Reference  is  made  to  military  equipment  established  in  and 
around  Kiaochow.  This  constitutes  additional  ground  for  nego- 
tiations. It  is  with  the  desire  definitely  to  settle  with  China  as 
to  the  disposition  of  this  equipment  that  the  Japanese  Govern- 
ment seeks  to  commence  negotiations.  If  the  Chinese  Govern- 
ment shall  proceed  to  negotiate,  it  need  hardly  be  emphasised 
that  all  minor  questions  will  be  solved  simultaneously." 


In  conclusion,  while  the  Japanese  Government  deeply  regrets 
the  enforced  delay  in  carrying  out  the  agreements  reached  at 
the  Paris  conference,  it  stands  unchanged  in  its  sincere  desire 
to  promote  a  fair  and  just  solution  of  this  question  with  the 
least  possible  delay  and  to  pursue  a  fixed  policy  toward  China. 


In  view  of  the  unusual  extent  to  which  Japan  could 
exert  her  influence  upon  the  Peking  Government  at 
the  time — the  Anfu  Clique,  known  to  be  of  pro-Jap- 
anese leaning,  being  the  dominating  power  then 
behind  the  Government,  China's  steadfast  refusal  to 
negotiate  directly  with  Japan  for  the  restitution  of 


ATTEMPTS  AT  DIRECT  NEGOTIATION        219 

the  Shantung  peninsula  was  remarkable.  This  unal- 
terable attitude  can  be  explained  on  many  grounds. 
In  the  first  place,  Mr.  Lou  Tseng-hsiang,  the  Chinese 
Minister  of  Foreign  Affairs  and  China's  chief  dele- 
gate at  Versailles,  was  opposed  to  direct  negotiation, 
and  his  opposition  for  which  he  incurred  the  dis- 
favour of  the  Anfu  Clique  was  responsible  for  his 
resignation.  The  reason  he  gave  for  his  opposition 
was  also  the  reason  held  by  the  Chinese  people  in 
general:  China  could  not  negotiate  the  return  of 
Shantung  on  the  basis  of  the  Chino- Japanese  treaty 
of  1915  and  the  Versailles  Treaty,  neither  of  which 
had  been  recognised  by  her  as  valid  or  binding.  And 
no  doubt,  the  universal  opposition  against  direct 
negotiation  lent  a  good  deal  of  moral  encouragement 
to  the  Peking  Government,  whose  eyes  were  finally 
opened  to  the  advisability  of  avoiding  any  hurried 
step  and  to  the  possibility  of  submitting  the  question 
to  the  League  of  Nations.  It  was  generally  hoped 
that  the  boycott  instituted  against  Japanese  goods 
might  help  bring  Japan  to  reasonable  terms  of  settle- 
ment. "The  longer  China  keeps  away  from  direct 
negotiation,"  asserted  those  who  placed  full  con- 
fidence in  the  power  of  the  boycott,  "the  surer  she  is 
to  obtain  favourable  terms."  The  Peking  Govern- 
ment appreciated  the  possibility  of  the  situation,  and 
was  also  willing  to  adopt  the  suggestion,  advanced  by 
an  English  publicist  in  China,  that  a  commission 
should  be  appointed  to  study  the  conditions  in  Shan- 
tung before  opening  discussions  with  Japan  as  to  its 
return.  All  these  considerations  had  a  good  effect 
upon  the  Peking  Government  which,  in  spite  of  the 
considerable  influence  brought  to  bear  upon  it  by 


220  THE  SHANTUNG  QUESTION 

pro- Japanese  parties  in  China,  set  its  face  resolutely 
against  direct  negotiation. 

More  than  a  year  had  elapsed  before  Japan  made 
another  attempt  to  bring  China  to  direct  parley. 
The  calling  of  the  Conference  to  discuss  limitation  of 
armament  and  problems  of  the  Pacific  and  the  Far 
East  stirred  Japan  to  action  once  again.  The  fact 
that  China  was  among  the  invited  Powers  to  attend 
the  Washington  Conference  made  it  reasonably  cer- 
tain that  she  would  attempt  to  air  all  her  grievances, 
of  which  the  Shantung  question  could  easily  be  the 
most  serious.  It  was,  therefore,  obviously  to  Japan's 
advantage  to  dispose  of  it,  if  possible,  in  advance  of 
the  meeting  of  the  Conference,  so  as  to  avoid  an 
unpleasant  arraignment  before  the  bar  of  public 
opinion  of  the  world.  It  was,  besides,  good  diplomacy 
on  Japan's  part  to  show  that  she  was  quite  disposed 
to  settle  the  Shantung  question  if  China  were  only 
willing  to  accept  her  terms.  If  accepted,  well  and 
good ;  if  not,  Japan  would  be  in  a  morally  strong  posi- 
tion, and  able  to  show  the  Washington  Conference 
and  the  world  that  she  was  not  responsible  for  the 
delay.  Thus,  on  September  7,  1921,  Mr.  Yukichi 
Obata,  the  Japanese  Minister  in  Peking,  transmitted 
to  the  Chinese  Foreign  Office  the  following  memoran- 
dum containing  nine  proposals  for  the  settlement  of 
the  Shantung  question,  which  represented,  he  said, 
Japan's  final  concessions :  '* 


*  It  was  asserted  that  the  Japanese  memorandum  of  September  7,  1921, 
containing  nine  proposals,  was  prepared  in  response  to  the  wishes  of  certain 
officials  of  the  Chinese  Government,  who  were  desirous  of  opening  negotia- 
tions with  Japan  for  the  settlement  of  the  Shantung  question  and  anxious 
to  see  that  a  concrete  project,  "couched  in  just  and  reasonable  terms," 
should  be  submitted  by  the  Japanese  Government  with  this  object  in  view. 


ATTEMPTS  AT  DIRECT  NEGOTIATION        221 

TRANSLATION  OF  THE  PROPOSALS  FOR  THE  SETTLEMENT  OF  THE 
SHANTUNG  QUESTION  PRESENTED  BY  THE  JAPANESE  MINISTER 
IN  PEKIN  TO  THE  WAICHIAO  Pu  ON  SEPTEMBER  TTH,  1921.* 

General  principles  for  the  readjustment  of  the  Shantung 
questions : — 

1.  To  return  to  China  the  Lease  of  the  Kiaochow  Bay  Territory 
and  the  rights  relating  to  the  Neutral  Zone. 

2.  In  case  the  Chinese  Government  on  its  own  initiative  throws 
open  the  entire  Leased  Territory  as  a  commercial  port,  recog- 
nizes the  liberty  of  residence,  industry,  agriculture  and  other 
lawful  undertakings  of  foreigners,  and  respects  and  recognizes 
the    vested    rights    of    foreigners,    the    Japanese    Government 
agrees  to  the  withdrawal  of  the  proposal  for  the  establishment  of 
special  and  international  settlements.    With  a  view  to  foreign 
residence  and  commerce  the  Chinese  Government  will  as  soon 
as  possible  throw  open  suitable  cities  and  marts  in  the  Province 
of  Shantung.    The  regulations  governing  the  opening  as  marts 
of  the  above-mentioned  places  will  be  formulated  by  the  Chinese 
Government  in  consultation  with  the  interested  countries. 

3.  The  Shantung  Railway  and  the  mines  appertaining  thereto 
are  considered  as  an  organization  under  joint  Chinese  and  Jap- 
anese  operation. 

4.  All  preferences  and  options  relating  to  the  employment  of 
persons  and  the  supply  of  capital  and  materials  that  are  based 
on  the  Kiaochow  Convention  are  to  be  renounced. 

5.  The  right  to  the  extension  of  the  Shantung  Railway  and 
any  option  with  regard  to  the  Chefoo-Weishsien  and  other  rail- 
ways are  to  be  assigned  to  the  common  undertaking  of  the  new 
Consortium. 

6.  The  Customs  Administration  at  Tsingtao  is  to  be  made 
even  more  truly  and  clearly  than  the  system  under  the  German 
regime  an  integral  part  of  the  Chinese  Customs  Administration. 

7.  The    administrative    government    properties    within    the 
Leased  Territory  are  in  principle  to  be  ceded  to  China  but 
further  agreements  will  be  made  relating  to  the  administration 
and  maintenance  of  public  constructions. 

*  This  was  published  simultaneously  in  Peking  and  Tokio,  on  September 
16,  1921.  It  may  be  noted  here  that  the  version  given  out  by  the  Japanese 
Embassy  at  Washington  referred  (proposal  7)  to  the  restoration  of  the 
public  properties  within  the  leased  territory  in  general,  while  the  version 
furnished  by  the  Chinese  Legation  had  the  return  of  the  public  properties 
in  principle. 


222  THE  SHANTUNG  QUESTION 

8.  For  the  conclusion  of  further  agreements  relative  to  the 
details  involved  in  the  execution  of  the  above  mentioned  arrange- 
ments and  to  other  matters  the  Chinese  and  Japanese  Govern- 
ments shall  as  soon  as  possible  appoint  delegates. 

9.  Although  further  agreements  are  to  be  concluded  between 
China  and  Japan  relative  to  the  organization  of  the  Special 
Police  Force  for  the  Shantung  Railway  upon  receipt  of  the 
notification  from  the  Chinese  Government  of  the  organization 
of  the  Police  Force  the  Japanese  Government  shall  according 
to  its  repeated  declarations   immediately   announce   the   with- 
drawal of  its  troops  and  shall  withdraw  them  upon  the  handing 
over  of  the  functions  of  policing   the  railway  to   the   Police 
Force.* 

A  close  reading  of  the  foregoing  memorandum  will 
readily  show  that,  while  it  represented  certain  con- 
crete proposals  for  the  settlement  of  the  Shantung 
question,  they  were  open  to  serious  objections.  Take 
the  first  proposal,  for  instance.  While  Japan  ap- 
peared to  be  generous  enough  to  return  to  China  the 
leased  territory  of  Kiaochow  Bay  and  the  rights 
relating  to  the  Neutral  Zone,  the  acceptance  by  China 
of  this  generous  offer  would  carry  the  implication 
that  the  territory  and  the  Neutral  Zone  belonged 
to  Japan  and  not  to  China.  In  other  words,  China 

*  The  following  is  a  Japanese  official  communique  relating  to  Mr.  Obata's 
Note  to  the  Waichiaopu  of  the  7th  of  September,  1921:— 

"In  an  interview  on  the  7th  instant  with  the  Chinese  Minister  of  Foreign 
Affairs,  the  Japanese  Minister  presented  to  the  former  the  compendium 
of  items  as  the  fundamental  principles  of  negotiation  for  the  settlement  of 
questions  regarding  Shantung,  appealing  as  he  did  to  the  earnest  and 
serious  consideration  of  the  Chinese  Government  and  urging  again  for  the 
speedy  opening  of  negotiations  upon  the  matter.  It  was  also  proposed 
to  the  Chinese  Government  that  the  latter  declare  as  soon  as  possible  their 
willingness  to  open  the  said  negotiations  on  the  basis  of  the  aforesaid 
compendium  and  that  they  appoint  at  the  same  time  a  commission  for  the 
purpose  of  arranging  details  and  other  matters  relevant  thereto. 

"In  view  of  wild  conjectures  being  freely  made  outside  upon  the  contents 
of  the  proposal  of  the  Japanese  Government  and  threatening  to  give  rise 
to  misunderstandings  it  is  now  deemed  necessary  to  make  public  the  said 
compendium,  in  order  to  make  clear  the  real  state  of  aifairs." 

This  statement  was  followed  by  a  Japanese  translation  of  Mr.  Obata's 
note,  containing  the  nine  proposals  given  above. 


ATTEMPTS  AT  DIRECT  NEGOTIATION        223 

would  be  compelled  tacitly  to  abandon  her  position 
that  the  lease  of  Kiaochow  came  to  an  end  with  her 
declaration  of  war  upon  Germany.  And  the  third 
proposal  could  be  considered  as  a  "  joker " ;  it  referred 
nothing  at  all  to  the  restoration  or  the  redemption  of 
the  Kiaochow-Tsinan  Railway,  whereas  it  suggested 
joint  enterprise  which  had  been  vigorously  opposed 
by  the  Chinese  people.  The  other  proposals  were 
either  too  vague  in  language  or  indefinite  in  meaning. 
It  was  with  these  objections  in  view  that  the  Peking 
Government  declined  to  accept  them  as  adequate 
bases  for  negotiation.  The  following  memorandum 
by  the  Chinese  Government  answered  all  the  pro- 
posals, except  No.  4,  which  was  deemed  satisfactory, 
and  No.  8,  which  required  no  answer : 

CHINESE  MEMORANDUM,  OCTOBER  5,  1921 

With  the  reference  to  the  important  Shantung  question,  which 
is  now  pending  between  China  and  Japan,  China  has  indeed 
been  most  desirous  of  an  early  settlement  for  the  restitution  of 
her  sovereign  rights  and  territory.  The  reason  why  China  has 
not  hitherto  been  able  to  commence  negotiations  with  Japan 
is  that  the  basis,  upon  which  Japan  claims  to  negotiate,  is  all 
of  a  nature  so  highly  objectionable  to  the  Chinese  Government 
and  the  Chinese  people  that  it  cannot  be  recognized.  Further- 
more, in  regard  to  the  Shantung  question,  although  Japan  has 
made  many  vague  declarations,  she  has  in  fact  had  no  plan  which 
is  fundamentally  acceptable.  Therefore  the  case  has  been 
pending  for  many  years,  contrary  to  the  expectation  of  China. 
On  September  7,  Japan  submitted  certain  proposals  for  the 
readjustment  of  the  Shantung  question  in  the  form  of  a  memo- 
randum, together  with  a  verbal  statement  by  the  Japanese 
Minister  to  the  effect  that,  in  view  of  the  great  principle  of 
Sino-Japanese  friendship,  Japan  has  decided  upon  this  fair  and 
just  plan,  as  her  final  concession,  etc.  After  careful  considera- 
tion, the  Chinese  Government  feels  that  much  in  Japan's  new 
proposals  is  still  incompatible  with  the  repeated  declarations 


224  THE  SHANTUNG  QUESTION 

of  the  Chinese  Government,  with  the  hopes  and  expectations  of 
the  entire  Chinese  people,  and  with  the  principles  laid  down  in 
treaties  between  China  and  the  foreign  Powers.  If  these  pro- 
posals are  to  be  considered  the  final  concession  on  the  part  of 
Japan,  they  surely  fall  short  to  prove  the  sincerity  of  Japan's 
desire  to  settle  the  question.  For  instance: 

Proposal  (1)  The  lease  of  Kiaochow  expired  immediately  on 
China's  declaration  of  war  against  Germany.  Inasmuch  as 
Japan  is  only  in  military  occupation  of  the  leased  territory,  it 
should  be  wholly  returned  to  China  without  conditions.  There 
can  be  no  question  of  any  leasehold. 

Proposal  (2)  As  to  the  opening  of  Kiaochow  Bay  as  a  com- 
mercial port  for  the  convenience  of  trade  and  residence  of  the 
nationals  of  all  friendly  powers,  China  has  already  on  previous 
occasions  communicated  her  intentions  to  do  so  to  the  powers,  and 
there  can  be  no  necessity  for  the  establishment  of  any  purely 
foreign  settlement  again.  Agricultural  pursuits  concern  the 
fundamental  means  of  existence  of  the  people  of  a  country; 
and  according  to  the  usual  practice  of  all  countries,  no  foreigners 
are  permitted  to  engage  in  them.  The  vested  rights  of  foreigners 
obtained  through  lawful  processes  under  the  German  Regime 
shall  be  respected,  but  those  obtained  by  force  and  compulsion 
during  the  period  of  Japanese  military  occupation  and  against 
law  and  treaties  can  in  no  wise  be  recognized.  And  again 
although  this  same  article,  in  advocating  the  opening  of  cities 
and  towns  of  Shantung  as  commercial  ports,  agrees  with  China's 
intention  and  desire  of  developing  commerce,  the  opening  of 
such  places  should  nevertheless  be  left  to  China's  own  judgment 
and  selection  in  accordance  with  circumstances.  As  to  the 
regulations  governing  the  opening  of  such  places,  China  will 
undoubtedly  bear  in  mind  the  object  of  affording  facilities  to 
international  trade  and  formulate  them  according  to  established 
precedents  of  self-opened  ports,  and  sees,  therefore,  no  neces- 
sity in  this  matter  for  any  previous  negotiations. 

Proposal  (3)  The  joint  operation  of  the  Shantung  Rail- 
way, that  is,  the  Kiaochow-Tsinan  Line,  by  China  and  Japan 
is  objected  to  by  the  entire  Chinese  people.  It  is  because  in 
all  countries  there  ought  to  be  a  unified  system  of  railways,  and 
joint  operation  destroys  unity  of  railway  management  and 
impairs  the  rights  of  sovereignty.  In  view  of  the  evils  of  the 
previous  cases  of  joint  operation  and  the  impossibility  of  cor- 
recting them,  China  can  now  no  longer  recognize  it  as  a  matter 


ATTEMPTS  AT  DIRECT  NEGOTIATION        225 

of  principle.  The  whole  line  of  the  Shantung  Railway,  together 
with  the  right  of  control  and  management  thereof,  should  be 
completely  handed  over  to  China;  and  after  a  just  valuation 
of  its  capital  and  properties,  one-half  of  the  whole  value  of  the 
line  not  returned  shall  be  purchased  back  by  China  within  a 
fixed  period.  As  to  the  mines  appurtenant  to  the  Shantung 
Railway,  which  were  already  operated  by  the  Germans,  their 
plan  of  operation  shall  be  fixed  in  accordance  with  the  Chinese 
Mining  Laws. 

Proposal  (5)  With  reference  to  the  construction  of  the 
extension  of  the  Shantung  Railway,  that  is,  the  Tsinan-Shunteh 
and  Kiaochow-Hsuchow  Lines,  China  will,  as  a  matter  of  course, 
negotiate  with  international  financial  bodies.  As  to  the  Chef  oo- 
Weihsien  Railway,  it  is  entirely  a  different  case  and  cannot 
be  discussed  in  the  same  category. 

Proposal  (6)  The  Custom  House  at  Tsingtao  was  formerly 
situated  in  the  leased  territory  and  the  system  of  administration 
differed  slightly  from  others.  When  the  leased  territory  is 
restored,  the  Custom  House  thereat  should  be  placed  under  the 
complete  control  and  management  of  the  Chinese  Government 
and  should  not  be  different  from  the  other  Custom  Houses  in 
its  system  of  administration. 

Proposal  (7)  The  extent  of  public  properties  is  too  wide  to 
be  limited  only  to  that  portion  used  for  administration  purposes. 
The  meaning  of  the  statement  in  the  Japanese  memorandum 
that  such  property  will  in  principle  be  transferred  to  China,  etc., 
rather  lacks  clearness.  If  it  is  the  sincere  wish  of  Japan  to 
return  all  public  properties  to  China,  she  ought  to  hand  over 
completely  the  various  kinds  of  official,  semi-official,  municipal 
and  other  public  properties  and  enterprises  to  China  to  be  dis- 
tributed, according  to  their  nature  and  kind,  to  the  administra- 
tion of  the  central  and  local  authorities,  to  the  municipal  council 
and  to  the  Chinese  Customs,  etc.,  as  the  case  may  be.  Regarding 
this  there  is  no  necessity  for  any  special  arrangement,  and 

Proposal  (9)  The  question  of  the  withdrawal  of  Japanese 
troops  from  the  Province  of  Shantung  bears  no  connection  with 
the  restoration  of  the  Kiaochow  Leased  Territory  and  the 
Chinese  Government  has  repeatedly  urged  its  actual  execution. 
It  is  only  proper  that  the  entire  Japanese  Army  of  Occupation 
should  now  be  immediately  evacuated.  As  to  the  policing  of  the 
Kiaochow-Tsinan  Railway,  China  will  immediately  send  a  suit- 
able force  of  Chinese  Railway  Police  to  take  over  the  duties. 


226  THE  SHANTUNG  QUESTION 

The  foregoing  statement  gives  only  the  main  points  which  are 
unsatisfactory  and  concerning  which  the  Chinese  Government 
feels  it  absolutely  necessary  to  make  a  clear  declaration. 
Further,  in  view  of  the  marked  difference  of  opinion  between  the 
two  countries,  and  apprehending  that  the  case  might  long  remain 
unsettled,  China  reserves  to  herself  the  freedom  of  seeking  a 
solution  of  the  question  whenever  a  suitable  occasion  presents 
itself. 

The  above  exposition  of  China's  attitude  on  the 
Shantung  question  was  said  to  be  unsatisfactory  to 
Japan.  In  the  Japanese  press,  it  was  considered  as 
" discourteous"  and  " outrageous."  It  was  reported 
that  at  the  time  when  the  above  note  was  handed  to 
the  Japanese  Minister  in  Peking,  he  declared  that, 
inasmuch  as  he  was  not  sure  that  the  nature  of  the 
Chinese  reply  was  acceptable  to  Tokio,  he  could  only 
receive  the  note  informally,  with  the  understanding 
that  it  would  be  returned  if  it  were  unacceptable. 
The  note  proved  to  be  unacceptable,  in  the  sense  that 
the  views  expressed  therein  were  not  shared  by  the 
Japanese  Government,  but  it  was  not  returned. 

One  consideration  that  had  more  than  any  other 
influenced  the  Peking  Government  to  decline  negotia- 
tion was  the  possibility  of  settling  the  Shantung 
question  at  the  Washington  Conference.  The  inten- 
tion of  the  Chinese  Government  was  perfectly  clear 
when  it  declared  in  the  above  note  that  it  reserved 
"the  freedom  of  seeking  a  solution  of  the  question 
whenever  a  suitable  occasion  presents  itself."  The 
Conference  to  be  held  in  Washington  to  discuss 
Pacific  and  Far  Eastern  problems  in  connection  with 
limitation  of  armament  was  considered  "a  suitable 
occasion."  Indeed,  the  Peking  Government  made  no 
secret  of  the  fact,  and  it  was  generally  assumed  that 


ATTEMPTS  AT  DIRECT  NEGOTIATION        227 

by  bringing  the  Shantung  question  before  the  Wash- 
ington Conference  China  could  obtain  better  terms 
of  settlement  than  she  could  through  direct  negotia- 
tion with  Japan.  In  view  of  the  imminence  of  the 
Conference,  the  Peking  Government  was,  of  course, 
averse  to  begin  any  conversations  with  Japan,  which 
would  in  all  probability  continue  beyond  the  date  of 
the  Conference  and  make  it  difficult  to  break  off  the 
parleys  thus  commenced  in  order  to  present  the  ques- 
tion to  the  Conference. 

While  the  confident  expectation  of  securing  more 
than  half  a  loaf  at  Washington  seemed  to  justify  the 
refusal  by  the  Peking  Government  to  accept  the  offer 
of  mere  crumbs  from  Tokio,  still  it  would  not  be  a  bad 
policy  for  China  to  begin  negotiations,  in  advance  of 
the  meeting  of  the  Washington  Conference,  on  those 
subjects  that  were  susceptible  of  negotiation.  The 
better  part  of  wisdom  would  be  that  informal  con- 
versations should  be  opened  with  Japan,  either  in 
Tokio  or  Peking,  and  carried  to  a  point  where  it 
would  become  apparent  that  Japan's  terms  were  not 
acceptable  and  that  settlement  was,  therefore,  impos- 
sible through  direct  negotiation.  In  that  case,  China 
would  be  in  the  strategic  position  of  knowing  exactly 
what  Japan  wanted  and  what  she  was  prepared  to 
return.  China  would  also  be  in  a  morally  strong 
position  to  appeal  to  the  public  opinion  of  the  world. 
She  could  demand  immediate  consideration  of  the 
question  by  the  Washington  Conference  when  it  con- 
vened, and  it  could  not  afford  to  refuse  the  demand 
in  face  of  the  strong  public  opinion  which  was  sure 
to  rally  to  China's  assistance.  Unfortunately,  how- 
ever, the  public  sentiment  in  China  was  at  the  time 


228  THE  SHANTUNG  QUESTION 

so  overwhelmingly  opposed  to  direct  parley  and  so 
obsessed  by  the  curative  power,  real  or  imaginary, 
of  the  Washington  Conference  that  what  promised  to 
be  the  soundest  and  most  practical  procedure  of 
arriving  at  a  possible  settlement  of  the  Shantung 
question  was  discarded. 

In  spite  of  China's  refusal  for  the  second  time 
to  begin  direct  negotiations,  Japan  remained  un- 
daunted. In  her  note  of  October  19,  1921,  she 
expressed  her  readiness  once  again  to  embark  on 
negotiations  on  the  Shantung  question  and  the  hope 
that  China  would  soon  change  her  policy  "in  full 
appreciation  of  the  main  purpose  of  the  Japanese 
proposal  and  upon  giving  more  deliberate  consider- 
ation to  the  question  now  at  issue. "  The  note  reads : 

JAPANESE  NOTE,  OCTOBER  19,  1921 

The  Japanese  Government  have  submitted  to  their  most  care- 
ful consideration  the  memorandum  of  the  Chinese  Government 
dated  October  5th  relative  to  the  Shantung  question. 

The  Japanese  Government,  animated  as  they  have  long  been 
by  a  keen  desire  for  the  speedy  settlement  of  this  question,  have 
hitherto  spared  no  effort  to  achieve  its  realisation.  In  fact, 
directly  the  Treaty  of  Peace  with  Germany  came  into  force  in 
January  last  year,  the  Japanese  Government  invited  the  Chinese 
Government  to  enter  into  negotiations  on  this  subject.  No 
response,  however,  was  returned  from  China  for  several  months. 
When  it  eventually  came,  it  simply  expressed  her  unreadiness 
to  proceed  with  the  direct  negotiations  with  Japan,  on  the  ground 
of  her  non-adherence  to  the  Treaty  of  Peace  with  Germany  as 
well  as  of  the  opposition  on  the  part  of  the  general  public  to 
such  steps.  Whereupon  the  Japanese  Government,  while  inviting 
the  Chinese  Government  to  reconsider  the  matter  for  the  reasons 
then  advanced,  made  known  their  willingness  to  open  negotia- 
tions with  China  at  any  moment  whenever  considered  opportune 
by  her.  More  than  twelve  months  have  elapsed  since  then. 
Throughout  that  time,  the  Japanese  Government  have  been 


ATTEMPTS  AT  DIRECT  NEGOTIATION        229 

patiently  waiting  for  the  advent  of  a  good  opportunity  for  taking 
up  this  question,  always  hoping  that  the  time  may  arrive  when 
calm  and  fair  counsels  may  prevail  among  the  Government  and 
people  of  China. 

In  the  meantime,  the  attitude  of  the  authorities  concerned  in 
China  has  undergone  a  considerable  change.  On  more  than  one 
occasion  they  made  it  known  to  the  Japanese  Government  that 
they  were  desirous  of  opening  pourparlers  with  Japan  on  this 
subject.  In  particular,  on  the  eve  of  Mr.  Obata's  departure 
for  Japan  in  May  last,  the  Chinese  Foreign  Minister  expressed 
to  him  his  ardent  desire  to  see  a  concrete  project  presented  by 
Japan,  couched  in  just  and  reasonable  terms,  such  as  would 
simultaneously  be  deemed  fair  on  all  hands.  Subsequently  the 
authorities  concerned  in  China  confidentially  presented  to  the 
Japanese  Government  a  certain  project  in  regard  to  this  question, 
and  later  they  expressed,  though  unofficially,  their  readiness  to 
open  negotiations  with  Japan.  The  Japanese  Government, 
prompted  by  a  desire  to  reach  a  satisfactory  and  speedy  settle- 
ment of  this  question,  and  taking  into  full  account  the  Chinese 
project  above  referred  to,  made  an  overture  to  the  Chinese 
Government  on  September  7th  last  embodying  most  generous 
and  fair  terms,  and  invited  to  this  the  deliberate  consideration 
of  that  Government. 

Contrary,  however,  to  the  expectation  of  the  Japanese  Govern- 
ment, the  Chinese  Government,  in  their  memorandum  under 
consideration,  expressed  their  unwillingness  to  proceed  for  the 
time  being  with  the  negotiations  in  question  on  the  ground  that 
the  terms  of  settlement  as  proposed  by  the  Japanese  Government 
fall  short  of  convincing  them  of  the  sincerity  of  Japan  in  her 
desire  to  settle  this  question.  Further  they  used  at  the  begin- 
ning of  their  memorandum  an  expression  characterising  most 
of  the  Japanese  declarations  hitherto  made  as  hollow  and  devoid 
of  meaning.  The  Japanese  Government  keenly  regrets  for  the 
sake  of  China  that  such  an  expression  derogatory  to  principles 
of  international  courtesy  should  have  been  used  by  her. 

Furthermore  the  contentions  put  forward  by  China  vis-a-vis 
the  Japanese  project  are  inexplicit  and  in  particular  there  are 
a  number  of  points  to  which  the  Japanese  Government  invites 
the  reconsideration  of  the  Chinese  Government.  For  instance 
the  argument  advanced  by  her  that  the  rights  formerly  enjoyed 
by  Germany  in  regard  to  the  lease  of  Kiaochow,  having  totally 
expired  in  consequence  of  China's  declaration  of  war  against 


230  THE  SHANTUNG  QUESTION 

Germany,  should  be  restored  to  China  without  conditions,  is  not 
only  one  hardly  to  be  warranted  by  the  principles  and  usages 
of  international  law  or  by  the  treaties  in  existence  between  China 
and  Japan,  but  may  be  said  to  aim  at  the  frustration  of  the  effects 
of  the  Versailles  treaty.  On  May  20th  last  the  German 
representative  in  China  declared  in  his  statement  addressed  to 
the  Chinese  Foreign  Minister  that  by  virtue  of  the  Versailles 
treaty,  Germany  had  renounced  all  the  rights  and  interests  she 
formerly  enjoyed  in  Shantung  under  the  Sino-German  agree- 
ments, and  that  she  was  no  longer  capable  of  restoring  them 
direct  to  China.  This  declaration  having  been?  duly  taken  note 
of  by  the  Chinese  Government,  they  are  deemed  to  be  fully  cog- 
nisant of  the  effects  produced  by  the  Versailles  treaty.  It  will 
be  remembered  that  the  Chinese  declaration  of  war  against 
Germany  was  made  in  August,  1917,  when  more  than  two  years 
had  already  elapsed  since  the  transfer  of  the  former  German 
rights  to  Japan  had  been  fully  recognised  by  China  in  virtue 
of  the  Sino-Japanese  treaty  concerning  Kiaochow  and  other 
matters,  and  China  made  her  declarations  of  war  only  at  the 
instance  of  the  Allied  Powers  receiving  in  return  for  her  action 
various  advantages  at  their  hands.  The  Chinese  efforts  in  the 
war  amounted  to  the  deportation  of  Germans  and  Austrians  from 
China  and  the  dispatch  of  workmen  to  France.  The  Chinese  con- 
tention, therefore,  that  the  rights  of  lease  expired  entirely  as  a 
natural  consequence  of  the  Chinese  declaration  of  war  against 
Germany  may  be  said  to  be  tantamount  to  the  wholesale  abnega- 
tion of  the  treaties  in  existence  as  well  as  of  all  the  established 
facts.  The  Japanese  Government  cannot  but  conclude  that  China 
has  no  respect  for  the  fundamental  ideas  which  should  govern 
the  negotiations  on  the  Shantung  question. 

As  regards  the  Chinese  assertion  concerning  the  Shantung 
Railway,  it  appears  that  she  intends  to  place  its  management 
under  her  own  complete  control  and  to  leave  for  the  time  being 
one-half  of  the  whole  value  to  the  railway  unpaid.  Japan,  while 
entertaining  no  intention  whatever  of  operating  the  railway  ex- 
clusively by  herself  in  any  shape  or  form,  is  unable,  in  view  of  the 
actual  railway  conditions  obtaining  in  China,  to  concur  in  the  sug- 
gestion that  the  railway  managements  should  be  left  entirely  in 
the  hands  of  the  Chinese  Government.  In  a  word,  Japan 's  desire  is 
to  operate  the  railway  in  the  most  successful  manner  by  means 
of  a  harmonious  co-operation  of  both  countries.  It  will  be  recalled 
that  the  Shantung  Railway  was  operated  by  Germany  alone  so 


ATTEMPTS  AT  DIRECT  NEGOTIATION        231 

long  as  it  remained  in  her  hands  and  that  Japan  has  taken  it 
over  from  her  to  the  sacrifice  of  lives  and  treasure.  In  spite  of 
that,  Japan  intends  to  work  it  as  a  joint  enterprise  with  China 
under  a  basis  of  utmost  impartiality. 

Further,  it  was  in  September,  1918,  a  date  long  after  the 
Chinese  declaration  of  war  against  Germany,  that  it  was 
arranged  between  China  and  Japan  to  operate  the  Shantung 
railway  as  their  joint  enterprise.  The  Japanese  Government 
are,  therefore,  unable  to  understand  the  Chinese  contention  in 
this  respect,  impugning  the  Japanese  claim  as  being  an  act 
which  violated  Chinese  sovereignty.  It  is  to  be  observed  that 
the  Reparation  Commission,  after  having  duly  appraised  the 
value  of  the  Shantung  Railway  together  with  appertaining 
mines,  placed  it  to  the  credit  account  of  Germany  with  a  view 
to  setting  it  off  against  the  indemnity  to  be  paid  by  that  Power. 
It  is,  therefore,  inadmissible  that  China  should  claim  to  retain 
one-half  of  such  railway  properties  in  her  hands  without  condi- 
tions. 

As  regards  the  Japanese  proposal  relative  to  the  public  prop- 
erty of  Germany,  Japan,  while  ready  in  principle  to  restore  the 
so-called  administrative  public  property  to  China,  has  no  inten- 
tion whatever  of  retaining  all  the  other  public  property  in  her 
hands,  her  wish  being  to  make,  in  the  interest  not  only  of  the 
people  of  China  and  Japan  but  also  of  the  foreign  population  in 
general,  a  satisfactory  arrangement  with  China  looking  to  an 
impartial  disposition  of  such  property.  The  Chinese  claim  to 
hold  it  entirely  in  Chinese  hands  is  one  which  can  hardly  be 
justified  in  the  nature  of  the  case.  Moreover  the  Japanese  Gov- 
ernment must  confess  that  they  are  unable  to  comprehend  the 
Chinese  assertion  that  the  Japanese  project  is  entirely  at  variance 
with  the  principles  underlying  all  the  treaties  between  China  and 
Foreign  Powers. 

The  Japanese  Government,  however,  is  happy  to  declare 
hereby  that  whenever  the  Chinese  Government,  in  full  apprecia- 
tion of  the  main  purpose  of  the  Japanese  proposal  and  upon 
giving  more  deliberate  consideration  to  the  question  now  at 
issue  in  the  interest  of  cordial  relations  between  China  and 
Japan,  shall  express  their  willingness  to  open  negotiations,  will 
always  be  found  ready  to  embark  upon  such  negotiations. 

Japan's  insinuation  that  her  proposal  of  Septem- 
ber 7  was  made  in  answer  to  the  wishes  of  the  Chinese 


232  THE  SHANTUNG  QUESTION 

Foreign  Minister  could  not  remain  unchallenged. 
On  November  4,  the  Chinese  Government  sent  the 
following  2,000- word  note  in  reply : 

CHINESE  REPLY,  NOVEMBER  4,  1921 

On  October  19,  the  Japanese  Government  again  presented 
to  the  Chinese  Government  a  memorandum  relative  to  the  Shan- 
tung question.  After  careful  consideration,  the  Chinese  Govern- 
ment feels  that  the  Japanese  Government  not  only  differs  funda- 
mentally from  the  views  of  the  Chinese  Government  as  expressed 
in  its  memorandum  of  October  5,  but  also  shows  apparently  much 
misunderstanding  in  its  interpretation  of  the  text  thereof.  The 
Chinese  Government,  therefore,  deems  it  highly  necessary  to 
make  a  further  declaration  concerning  the  past  facts  and  its 
uniform  point  of  view  from  first  to  last. 

The  Shantung  question  concerns  the  vital  interest  of  China. 
The  Chinese  Government  is  very  earnest  in  its  sincere  endeavors 
to  find  an  early  solution  of  the  question  even  much  more  so  than 
Japan.  It  is  only  due  to  the  fact  that  the  bases  of  settlement 
proposed  by  the  Japanese  Government  are  altogether  too  far 
apart  from  the  hopes  and  expectations  of  the  Chinese  Govern- 
ment and  people,  that  they  cannot  but  calmly  and  patiently  wait 
for  an  opportunity  to  come  when  Japan  may  reconsider  her 
position. 

As  to  the  statement  embodied  in  the  Japanese  memorandum 
under  consideration  to  the  effect  that,  on  the  eve  of  Minister 
Obata's  departure  for  Japan  in  May  last  of  this  year,  Foreign 
Minister  Yen  formally  declared  to  him  his  desire  to  see  a  concrete 
project  presented  by  the  Japanese  Government  couched  in  just 
and  satisfactory  terms  such  as  would  simultaneously  be  deemed 
fair  by  all  nations,  it  has  to  be  observed  that  when  leaving  for 
Japan,  Minister  Obata  inquired  of  Dr.  Yen  as  to  his  personal 
views  on  the  Shantung  question.  It  is  evident,  therefore,  that 
Dr.  Yen 's  answer  to  his  inquiry  is  purely  personal  and  is  not,  as 
it  is  alleged,  a  formal  statement  by  the  Chinese  Minister  of 
Foreign  Affairs. 

Again  is  is  alleged  in  the  Japanese  memorandum  under  con- 
sideration that  the  Chinese  Government  authorities  have  confi- 
dentially presented  to  the  Japanese  Government  a  certain  project 
of  the  settlement  of  the  question  and  that  they  also  unofficially 


ATTEMPTS  AT  DIRECT  NEGOTIATION        233 

expressed  their  readiness  to  open  negotiations  with  the  Japanese 
Government.  As  to  these  allegations  it  is  highly  probable  that 
they  must  have  risen  out  of  misunderstandings  caused  by  the 
round-about  repetition  of  personal  conversations  between  General 
Bansai  and  Councillor  Yu.  It  would  seem  to  be  wanting  in  discre- 
tion if  these  private  conversations  between  individuals  were  to 
be  referred  to  as  grounds  for  the  presentation  of  the  Japanese 
proposals  in  their  present  form. 

As  to  the  memorandum  handed  by  China  to  the  Japanese 
Minister  on  October  5,  it  enumerates  and  points  out  the  differ- 
ences of  view  between  China  and  Japan  both  regarding  the 
principles  underlying  the  proposals  of  Japan  and  regarding 
the  contents  of  the  terms.  If  Japan  had  a  true  understanding 
of  them,  she  should  certainly  propose  a  project  more  substantial 
and  just  as  would  be  generally  recognized  as  fair  by  all  sides.  It 
is,  however,  highly  regrettable  that  Japan  has  not  given  any 
sign  of  concession,  but,  on  the  contrary,  maintains  that  China 
has  openly  indicated  her  willingness  to  proceed  with  the  negotia- 
tions in  question. 

It  is  to  be  observed  that  the  reason  why  the  representatives 
of  China  were  not  able  to  sign  the  Versailles  Treaty  was  simply 
because  of  the  few  articles  therein  relative  to  the  Shantung 
question.  Since  China  has  not  signed  the  Versailles  Treaty  it 
is  impossible  to  oblige  China  to  accord  recognition  to  the  effects 
arising  from  the  said  treaty  regarding  the  Shantung  question. 
Therefore,  while  Japan  considers  that  the  leasehold  of  Kiaochow 
has  been  transferred  to  her  through  the  operation  of  the  Ver- 
sailles Treaty,  China  on  the  other  hand  deems  that  it  has  expired 
through  the  declaration  of  war  against  Germany.  This  dif- 
ference of  viewpoint,  if  insisted  upon  by  both  countries,  will 
forever  deprive  this  question  of  a  solution.  Since  Japan  is  will- 
ing to  restore  Kiaochow  completely  to  China,  there  is  no  more 
necessity  for  her  to  insist  on  the  aforesaid  point  of  dispute. 

As  to  the  criticism  directed  against  the  declaration  made  by 
the  German  representatives  to  China,  it  is  to  be  observed  that 
at  the  time  when  they  came  to  negotiate  the  Commercial  Agree- 
ment with  China,  China  still  insisted  on  her  demand  for  the 
restoration  of  Kiaochow,  but,  owing  to  the  circumstances  of  the 
European  War  and  to  treaty  restraint,  Germany  lost  by  force 
majeure  her  power  of  returning  Kiaochow  to  China,  for  which 
she  expressed  her  regret  to  the  Chinese  Government.  To  this, 
it  must  be  also  noted,  the  Chinese  Government  has  only  declared 


234  THE  SHANTUNG  QUESTION 

its  acknowledgment  of  Germany's  explanation  as  such  and  no 
more.  Indeed,  it  is  a  serious  misunderstanding  on  the  part  of 
Japan  to  construe  this  incident  to  mean  China's  recognition  of 
the  Versailles  Treaty. 

Again  it  is  to  be  observed  that  the  Kiaochow-Tsinan  Railway, 
built  within  Chinese  Territory,  was  primarily  an  undertaking 
of  a  corporation  and  Chinese  capital  was  also  invested  in  it. 
It  was  not  the  public  property  of  Germany,  nor  was  it  private 
property  exclusively  belonging  to  Germans,  although  it  was 
temporarily  operated  by  the  Germans.  China  had  long  been 
looking  forward  to  an  opportune  moment  for  its  reclamation. 

Furthermore,  the  right  of  policing  the  railway  belonged 
exclusively  to  China ;  there  was  absolutely  no  military  necessity 
justifying  the  occupation  of  the  railway  by  Japan  and  there 
was  really  no  justification  for  the  occupation  of  the  railway  for 
the  Japanese  Army.  Furthermore  there  were  then  no  German 
troops  stationed  along  the  line  of  the  railway  except  at  that 
part  lying  within  the  leased  territory.  At  the  time  of  the  occupa- 
tion of  the  railway,  Japan  encountered  no  resistance  whatever 
and  she  can  have  no  ground  to  claim  to  any  sacrifice  of  life  and 
treasure  suffered  on  account  of  the  railway.  Later  when  China 
joined  the  belligerent  nations  on  the  side  of  the  Allies  it  was  only 
proper  that  all  railways  within  the  territorial  bounds  of  China 
should  be  returned  to  her  own  control.  However,  the  Japanese 
troops  remained,  refusing  to  withdraw  and  caused  innumerable 
and  endless  losses  and  damages  to  the  Chinese  people  along  the 
line  of  the  railway.  The  Chinese  delegates  had  not  hesitated 
to  declare  this  fact  repeatedly  in  the  Peace  Conference  at  Paris. 
The  Chinese  memorandum  of  October  5  proposes  to  reclaim  the 
right  of  control  over  the  railway — not  to  divide  its  entire  capital 
and  property  into  two  halves — and  that,  as  to  the  half  obtained 
by  Japan,  it  is  to  be  redeemed  by  China  in  successive  periods. 
This  arrangement,  in  the  opinion  of  the  Chinese  Government,  is 
very  fair  and  just,  and  it  is  to  its  great  regret  that  Japan  has 
referred  to  it  as  a  proposal  devoid  of  meaning. 

It  is  to  be  inferred  that  in  the  opinion  of  the  Japanese  Govern- 
ment the  capital  and  property  of  the  Railway  have  been 
adjudged  by  the  Reparations  Commission  to  offset  German 
indemnities.  However,  it  must  not  be  overlooked  that  China  has 
not  signed  the  Versailles  Treaty,  consequently  how  can  the 
Reparations  Commission,  which  is  created  to  make  disposition 
of  property  within  Chinese  territory  to  satisfy  the  indemnity 


ATTEMPTS  AT  DIRECT  NEGOTIATION        235 

obligations  of  Germany?  Furthermore,  owing  to  China's  par- 
ticipation in  the  War  on  the  Allies'  side,  Germany  has  also  a 
certain  amount  of  indemnity  to  pay  to  China.  If  the  Kiaochow- 
Tsinan  Railway  is  to  be  used  as  an  article  to  satisfy  indemnity 
obligations,  China,  it  is  more  than  evident,  should  be  reim- 
bursed first. 

Again  with  reference  to -the  disposition  of  public  properties 
belonging  to  Germany,  as  long  as  the  Japanese  Government 
has  no  intention  of  holding  the  various  kinds  of  properties,  it  is 
only  right  that  they  should  be  handed  over  to  China  for  proper 
administration,  indeed  in  the  interests  of  the  nationals  of 
foreign  countries. 

The  Chinese  Government  is  most  desirous  of  deciding  upon 
a  just  and  fair  plan  of  settlement,  but  so  far  the  Japanese  Gov- 
ernment has  not  presented  to  China  its  avowed  contract  and 
fair  project.  It  is,  therefore,  impossible  for  the  Chinese  Govern- 
ment to  define  its  attitude  either  one  way  or  the  other.  In  a 
word,  the  views  of  the  Chinese  Government  have  already  in 
general  appeared  in  its  memorandum  of  October  5.  Owing  to 
the  fact  that  in  her  second  memorandum,  Japan  has  not  yet 
understood  China's  views  and  further  that,  with  reference  to 
the  railway,  her  proposals  are  more  difficult  to  accept  than  as 
stated  in  the  first  memorandum  leading  perhaps  in  a  direction 
contrary  to  that  of  an  early  solution  of  the  question,  the  Chinese 
Government  does  not  hesitate,  therefore,  in  taking  pains  again 
to  make  a  further  declaration  and  deeply  hopes  that,  for  the  sake 
of  the  everlasting  peace  of  the  Far  East  and  in  the  interest  of 
true  Sino-Japanese  friendship,  the  Japanese  Government  will 
again  give  its  fullest  consideration  to  the  question. 

In  conclusion,  with  reference  to  the  Japanese  troops  in  Shan- 
tung Province  the  Japanese  Government  has  long  been  promised 
to  withdraw  them  in  advance  and  their  actual  evacuation  at  an 
early  date.  It  is  to  be  recalled  it  was  also  urged  by  China  in  her 
last  memorandum.  However,  until  the  present,  the  actual 
evacuation  has  not  yet  begun.  As  promised  and  requested,  the 
Japanese  troops  in  question  should  be  recalled  at  an  early  date 
while  the  responsibility  of  policing  the  railway  will  as  a  matter 
of  course,  be  assumed  by  China's  own  police  force. 

WAICHIAO  Pu. 

Within  a  week  of  the  delivery  of  the  Chinese  reply, 
the  Washington  Conference  began  its  sessions.  It 


236  THE  SHANTUNG  QUESTION 

seemed  that  there  was  no  choice  now  but  to  bring  the 
question  before  the  Conference  as  the  Chinese  Gov- 
ernment and  people  had  desired.  But  they  were 
bound  to  be  disappointed,  for,  as  will  be  made  clear 
in  the  following  chapter,  the  Conference  refused  to 
take  cognisance  of  the  Shantung  question.  At  any 
rate,  with  China  declining  for  the  third  time, 
attempts  at  direct  negotiation  were  definitely  ended. 


XVIII 

THE  SHANTUNG  QUESTION  AT  THE  WASHINGTON 
CONFERENCE 

WHEN  the  Peking  Government  rejected,  on 
November  4,  1921,  Japan's  final  overture 
for  " direct  negotiation"  for  the  restora- 
tion of  the  Shantung  province,  it  was  as  good  as 
settled  that  China  would  bring  up  the  question  at  the 
Washington  Conference  where  it  could  be  discussed 
and  re-adjusted  in  the  full  view  of  the  other  Powers 
participating  in  the  Conference.  For  some  time 
there  had  been  a  good  deal  of  speculation  as  to  the 
possibility  of  China's  bringing  the  question  up  at  all. 
Inasmuch  as  the  Far  Eastern  programme  of  the  Con- 
ference included  questions  of  China's  territorial 
integrity  and  administrative  independence,  and  inas- 
much as  Japan's  continued  occupation  of  Shantung 
and  control  of  the  railways  in  the  province  would 
violate  this  very  integrity  and  independence,  it  was 
very  difficult,  indeed,  to  avoid  discussing  the  question. 
Thanks  to  the  good  offices  of  Mr.  Hughes  and  Mr. 
Balfour,  which  were  accepted  by  both  the  Chinese 
and  the  Japanese  delegates,  " conversations"  were 
commenced,  December  1,  looking  toward  a  settlement 
of  the  Shantung  question.  It  was  agreed  that  the 
result  of  the  " conversations,"  failure  or  success, 
should  be  reported  to  the  Conference. 
It  is  hardly  necessary  to  say  that  the  Shantung 


238  THE  SHANTUNG  QUESTION 

negotiation  begun  under  the  auspices  of  the  Con- 
ference, but  not  as  a  part  of  it,  and  assisted  by  the 
official  " observers"  of  the  American  and  British 
Governments,  was  in  the  nature  of  a  compromise  be- 
tween the  Japanese  viewpoint,  which  insisted  that 
this  question  lay  solely  between  Japan  and  China, 
and  the  Chinese  viewpoint,  which  contended  that  it 
was  an  international  problem.  The  Japanese  had 
maintained  that  the  Shantung  question  concerned 
Japan  and  China  alone,  and  as  such,  its  settlement 
could  be  effected  only  through  direct  negotiation  be- 
tween the  parties  concerned.  The  Chinese  had  main- 
tained that  it  was  an  international  problem,  concern- 
ing not  only  Japan  and  China,  but  also  many  other 
Powers  who  were  interested  in  its  settlement.  Thus, 
while  the  Japanese  Government  had  on  three  differ- 
ent occasions  (January  19,  1920,  September  7  and 
October  19,  1921)  made  overtures  for  "  direct  nego- 
tiation," for  three  times  (May  22,  1920,  October  5 
and  November  4,  1921)  the  Chinese  Government  had 
declined  it.  The  sentiment  of  the  Chinese  people  was, 
of  course,  strongly  and  vociferously  opposed  to  "di- 
rect negotiation"  which  they  had  reason  to  think 
might  be  seized  upon  by  Japan  as  an  opportunity  to 
strike  a  hard  bargain  with  China,  seeking  to  restitute 
Shantung  in  name,  not  in  fact.  The  procedure 
adopted  at  the  Washington  Conference  to  bring  about 
"collateral  conversations"  on  the  Shantung  question 
was,  therefore,  a  happy  compromise  between  the  Chi- 
nese and  the  Japanese  viewpoints.  It  saved  the  face 
of  the  Japanese,  for,  after  all,  they  negotiated  directly 
with  nobody  else  but  the  Chinese  representatives 
themselves  for  the  settlement  of  the  Shantung  ques- 


AT  THE  WASHINGTON  CONFERENCE         239 

tion;  it  saved  the  face  of  the  Chinese,  for,  in  the 
constant  presence  of  the  American  and  British  "  ob- 
servers," the  " conversations"  they  embarked  upon 
could  not  be  justly  and  accurately  described  as  " di- 
rect negotiation. " 

But  the  point  has  not  been  very  clearly  understood 
that  China's  consent  to  negotiate  with  Japan,  in  con- 
nection with  the  Conference,  on  the  return  of  Shan- 
tung, was  not  entirely  due  to  the  offer  of  good  offices 
by  Secretary  Hughes  and  Mr.  Balf  our.  It  was  due  in 
part  to  a  keen  realisation  by  the  Chinese  Government 
and  its  representatives  at  the  Conference  that  failure 
to  settle  the  Shantung  question  at  Washington  would 
either  postpone  the  settlement  indefinitely  or  make 
it  necessary  to  fall  back  upon  " direct  negotiation" 
between  Peking  and  Tokio.  The  Chinese  Govern- 
ment had  three  times  refused  "direct  negotiation"; 
public  opinion  in  China  would  not  allow  it.  It  would 
be,  therefore,  very  difficult  indeed  to  carry  on  "con- 
versations" between  Peking  and  Tokio,  which  could 
bring  about  a  satisfactory  solution.  On  the  other 
hand,  it  was  conceded  to  be  most  unwise  to  leave  the 
problem  where  it  had  been  for  the  last  seven  years. 
Not  only  would  it  remain  an  international  sore  spot 
and  make  impossible  the  establishment  of  cordial 
relations  between  the  two  nations,  but  also  it  would 
serve  as  a  convenient  excuse  for  Japan's  continued 
occupation  and  penetration  of  the  Shantung  prov- 
ince. Her  position  in  Shantung  might  be  so  firmly 
entrenched,  politically  and  economically,  that  it 
would  be  extremely  difficult  to  dislodge  her  in  the 
future.  Confronted  with  this  dilemma,  the  Chinese 
delegates  gladly  availed  themselves  of  the  oppor- 


240  THE  SHANTUNG  QUESTION 

tunity  afforded  by  the  Conference  and  the  offer  by 
Secretary  Hughes  and  Mr.  Balf our  of  their  friendly 
assistance. 

At  the  outset  of  the  Conference,  the  Chinese  dele- 
gates were  pressed  by  the  people  at  home  and  public 
opinion  abroad  to  take  up  the  Shantung  question 
immediately.  While  it  was  generally  conceded  that 
an  adjustment  of  the  question  would  be  considered 
very  necessary  in  connection  with  the  Conference,  the 
exact  manner  in  which  it  was  to  be  taken  up  was  not 
known.  It  was  urged,  and  repeatedly  reported,  that 
the  Chinese  delegation  would  bring  up  the  question 
before  the  full  session  of  the  Conference.  But  this 
talk  never  went  further  than  the  newspaper  columns. 
The  failure  of  the  Chinese  delegation  to  present  it  to 
the  Conference  was  perhaps  due  to  the  fact  that,  out 
of  all  the  Powers  attending  the  Conference,  no  less 
than  six  were  signatories  to  the  Versailles  Treaty 
which  handed  Shantung  to  Japan.  They  were,  very 
naturally,  averse  to  any  revision  by  the  Washington 
Conference  of  their  own  decision,  and  preferred  to 
have  Japan  and  China  to  argue  their  respective  views 
and  arrive  at  a  solution  between  themselves.  This 
view  was  made  known  to  the  American  Government. 
Thus,  when  approached  by  the  Chinese  delegates  as 
to  the  possibility  of  taking  up  the  Shantung  question 
before  the  Conference,  Secretary  Hughes  made  it 
very  clear  to  them  that  this  could  not  be  done.  The 
Chinese  delegates,  upon  whose  shoulders  rested  the 
responsibility  of  disposing  of  the  Shantung  question 
and  from  whom  much  was  expected  at  home,  found 
themselves  again  in  a  dilemma.  On  the  one  hand, 
they  were  instructed  by  their  Government  and 


AT  THE  WASHINGTON  CONFERENCE         241 

pressed  by  their  people  to  bring  the  Shantung  dispute 
before  the  Conference.  Failure  to  do  this  would 
mean  practically  the  failure  of  their  mission.  On 
the  other  hand,  they  were  told  that  this  could  not  be 
done.  They  could  see  no  graceful  way  out.  Bu,t  their 
embarrassment  was  greatly  relieved  when  Secretary 
Hughes  and  Mr.  Balfour  offered  their  good  offices, 
which  made  it  possible  to  begin  the  Shantung  negotia- 
tion at  the  Conference  and  yet  without  it. 

The  acceptance  of  the  good  offices  was  at  once  taken 
as  the  beginning  of  " direct  negotiation,"  against 
which  the  people  in  China  had  been  opposed  most 
strongly.  It  was  thought  that  the  resort  to  good 
offices  was  mere  subterfuge.  This  mistaken  concep- 
tion was  responsible  for  numerous  demonstrations 
both  in  China  and  in  Washington  against  the  opening 
of  the  Shantung  "conversations"  outside  of  the  Con- 
ference. But  it  must  be  understood  and  remembered 
that  Washington  is  not  Peking,  and  that  the  Chinese 
representatives  at  the  Conference  are  not  known  to  be 
yielding  and  complacent.  With  the  "conversations" 
carried  on  in  the  full  view  of  the  nine  Powers 
participating  in  the  Conference,  and  with  the  repre- 
sentatives, or  "observers,"  of  the  American  and 
British  Governments  constantly  present,  not  much 
opportunity  was  left  for  the  Japanese  diplomats  to 
exercise  their  knavery  and  trickery  which  were  quite 
possible  in  the  stolid  atmosphere  of  Peking  or  of 
Tokio. 

The  "conversations"  between  the  Chinese  and 
Japanese  delegates  relating  to  the  Shantung  question 
began  at  3  p.  m.,  December  1, 1921,  in  the  Conference 
Room  of  the  Pan-American  Building.  Mr.  Hughes 


242  THE  SHANTUNG  QUESTION 

and  Mr.  Balf  our  opened  the  meeting  and  then  retired, 
leaving  Sir  John  N.  Jordan,  Mr.  Miles  Lampson,  Mr. 
J.  V.  A.  MacMurray  and  Mr.  Edward  Bell  as  the 
British  and  American  " observers."  The  presence 
of  these  "  observers "  at  the  Shantung  conversations 
was  pointed  out  as  something  which  distinguished 
them  from  " direct  negotiation." 

In  response  to  the  opening  remarks  of  Mr.  Hughes 
and  Mr.  Balf  our,  both  of  whom  expressed  their  grati- 
fication in  the  acceptance  by  China  and  Japan  of 
their  good  offices  so  as  to  bring  about  a  fair  and  satis- 
factory arrangement  of  the  Shantung  dispute,  Baron 
Kato  and  Dr.  Sze  made,  respectively,  the  following 
statements  which  were  given  out  in  the  official  com- 
munique. The  Japanese  statement  reads : 

"We  are  sincerely  gratified  by  the  opportunity  which  has 
been  afforded  us  to  meet  with  the  representatives  of  China  in 
an  attempt  to  arrive  at  a  satisfactory  adjustment  of  the  Shantung 
question.  We  cannot  let  this  occasion  pass  without  expressing 
our  deep  appreciation  of  the  good  offices  of  Secretary  Hughes  and 
Mr.  Balfour,  which  has  made  the  present  meeting  possible. 

"It  is  needless  for  us  to  assure  you  that  Japan  is  eagerly 
looking  forward  to  an  early  settlement  of  this  long-pending  con- 
troversy. We  may  add  that  it  is  the  desire  of  the  Japanese 
people  to  eliminate  all  cause  of  misunderstanding  between 
China  and  Japan  in  order  that  these  two  neighboring  nations 
of  the  far  East  may  live  in  future  in  perfect  harmony.  And 
we  have  no  doubt  that  this  sentiment  is  fully  shared  by  our 
Chinese  friends. 

"We  are  not  unmindful  of  the  difficulties  with  which  the 
Chinese  Government  is  being  confronted  in  entering  into  direct 
negotiations  on  the  subject.  We  are,  however,  confident  that, 
if  approached  from  a  broader  perspective,  the  question  should 
be  susceptible  of  a  speedy  solution.  The  true  and  vital  interests 
of  the  two  nations  are  in  no  way  conflicting.  It  is  unfortunate 
that  the  real  issues  involved  have  been  very  largely  misunder- 
stood in  the  popular  mind.  The  term  'Shantung  question'  is 


AT  THE  WASHINGTON  CONFERENCE         243 

itself  a  misnomer.  The  question  is  not  one  which  affects  the 
whole  province  of  Shantung.  The  important  points  now  await- 
ing adjustment  relate  only  to  the  manner  of  restoring  to  China 
an  area  of  territory  less  than  one-half  of  one  per  cent,  of  the 
Shantung  province,  and  also  to  the  disposition  of  the  railway, 
290  miles  long,  and  its  appurtenant  mines,  formerly  under 
exclusive  possession  and  management  of  the  Germans.  There  is 
absolutely  no  question  of  full  territorial  sovereignty;  that  is 
being  exercised  by  China  throughout  the  length  and  breadth  of 
the  Province. 

"Careful  examination  of  the  correspondence  recently  ex- 
changed between  Japan  and  China  will  show  that  the  diver- 
gencies of  opinion  between  the  two  governments  are  more 
apparent  than  real.  We  are  hopeful  that  this  meeting  will  be 
able  to  determine  in  common  accord  the  essential  terms  of  settle- 
ment, leaving  the  matters  of  detail  or  of  local  nature  for 
arrangement  by  the  commissioners  of  the  two  governments  to 
be  specially  appointed  for  the  purpose." 

The  statement  by  Dr.  Sze  on  behalf  of  the  Chinese 
delegation  reads : 

1  i  Mr.  Hughes  and  Mr.  Balf our : 

1 '  I  desire  first  of  all  to  express,  on  behalf  of  the  Chinese  delega- 
tion, the  sincere  thanks  and  appreciation  for  the  friendly  and 
good  offices  that  you  two  gentlemen  have  offered  on  behalf  of 
your  two  countries  in  bringing  about  conversations  with  a  view 
to  a  fair  settlement  of  the  Shantung  question.  I  need  not  add 
anything  more  to  what  I  said  yesterday  at  the  general  meeting 
of  the  full  committee. 

"The  Shantung  question  is  one  of  vital  importance  to  China. 
Its  importance  to  China  and  the  difficulties  connected  therewith 
are  too  well  known  to  all  to  need  any  remarks  by  me  to-day. 
It  is  universally  admitted  that  the  condition  is  unsatisfactory  and 
that  an  early  and  speedy  solution,  fair  and  just  and  satisfactory 
to  the  desires  and  aspirations  of  the  Chinese  people,  is  necessary. 

"I  join  with  you  all  in  the  hope  that  our  conversations  will  be 
fruitful  of  results,  resulting  in  a  fair  and  just  settlement. 

"With  reference  to  the  observation  of  Baron  Kato  that  the 
Japanese  Government  was  not  unmindful  of  the  difficulties  which 
have  confronted  the  Chinese  Government  in  regard  to  the  method 
of  settling  this  question,  the  Chinese  delegation  is  gratified  that 


244  THE  SHANTUNG  QUESTION 

these  difficulties  have  been  perceived  by  the  Japanese  delegation 
— difficulties  which  have  made  necessary  the  resort  to  the  present 
procedure  which,  under  the  good  offices  of  Mr.  Hughes  arid  Mr. 
Balfour  in  behalf  of  their  respective  governments,  has  been 
initiated. ' ' 


In  thus  commencing  " conversations"  looking 
towards  a  Shantung  settlement,  the  Chinese  delegates 
were  compelled  to  accept  a  very  disadvantageous 
situation,  which  might  be,  under  the  existing  cir- 
cumstance, hard  to  avoid.  ' '  It  was  agreed  on  the  part 
of  the  two  delegations, "  the  communique  announced, 
"that  in  discussing  the  Shantung  question  they  would 
take  the  actual  facts  and  not  the  academic  viewpoints 
as  the  basis  of  discussion  which  will  be  for  the  sole 
purpose  of  promoting  mutual  understanding  and 
good  neighborhood  between  China  and  Japan,  and 
without  giving  ground  for  the  least  inference  that 
the  discussion  will  be  based  on  the  treaty  arrange- 
ments which  have  been  in  dispute  between  these  two 
countries  or  others."  In  other  words,  the  Chinese 
delegates  agreed  to  discuss  the  Shantung  question, 
not  on  the  basis  of  the  fact  that  China's  declaration  of 
war  upon  Germany  abrogated  the  Convention  of 
March  6, 1898,  and  that  China  was  not  a  party  to  the 
Versailles  Treaty,  but  on  "the  actual  facts"  pertain- 
ing to  Japan's  occupation  of  the  province.  It  was 
not  known  why  this  understanding  was  necessary. 
It  was  perhaps  designed  to  induce  Japan  to  give  up 
her  "academic  viewpoints"  and  her  insistence  upon 
the  treaties  of  1915  and  1918,  the  Secret  Allied  Agree- 
ments, and  finally  the  Versailles  Treaty.  It  was  per- 
haps meant  to  avoid  any  reference  to  the  Versailles 
Treaty  so  as  not  to  embarrass  those  Powers  at  the 


AT  THE  WASHINGTON  CONFERENCE         245 

Conference  who  are  its  signatories.  It  might  be  due 
to  the  desire  on  the  part  of  both  the  Chinese  and 
the  Japanese  delegates  to  effect  a  settlement  of  the 
dispute  without  referring  to  the  very  treaty  arrange- 
ments out  of  which  the  dispute  had  grown.  Whatever 
may  be  said,  it  is  nevertheless  true  that  the  position 
taken  by  the  Chinese  delegates  at  the  Washington 
Conference  was  the  reverse  of  that  taken  by  the 
Peking  Government.  In  its  notes  of  May  22,  October 
5,  and  November  4, 1921,  the  Peking  Government  con- 
sistently maintained  the  position  that  it  could  not 
enter  into  direct  negotiation  with  the  Japanese  Gov- 
ernment on  the  restoration  of  Shantung,  on  the 
ground  that  the  original  lease  Convention  was  abro- 
gated upon  China's  participation  in  the  European 
war  and  that  she  was  not  a  party  to  the  Versailles 
Treaty  of  Peace.  Now  for  the  Chinese  delegates  to 
abandon  this  contention  was  to  reverse  the  position 
which  the  Peking  Government  had  hitherto  main- 
tained. This  abandonment  left  them  no  choice  but 
to  accept  the  implied  but  none  the  less  clear  position 
of  a  supplicant,  that  of  trying  to  get  back  from  Japan 
as  much  as  possible,  after  granting  that  everything  in 
Shantung  was  lost  to  her.*  It  stands  to  reason  that 

*  Take,  for  instance,  the  following  statement  by  Mr.  Hanihara,  one  of 
the  Japanese  delegates,  on  the  Shantung  railway  question,  and  who  can 
deny  that  its  bold-facedness  was  largely  due  to  the  abandonment  by  China 
of  her  original  position?  Mr.  Hanihara  said  in  a  newspapermen's  confer- 
ence, January  6,  1922:  "Japan's  last  proposal  is  to  transfer  the  railway 
property  under  a  railway  loan  arrangement,  but  China  says  that  it  is 
not  acceptable,  and  the  Chinese  proposition  is  to  make  a  full  payment  in 
cash  or  to  make  deferred  payments.  Japan's  position  is  not  to  sell  the 
property — the  question  is  not  one  of  selling  out.  Japan's  original  proposi- 
tion was  to  make  the  railway  a  joint  enterprise  of  Japan  and  China.  The 
starting  point  of  Japan's  proposal  is  that  the  railway  is  Japan's  property 
and  not  China's,  but  as  China  expressed  her  wish  to  have  a  share  in  the 
property,  we  said,  'We  will  let  you  in  half  and  half.'  But  now  they  say 
this  is  not  acceptable  to  them;  that  they  want  the  whole  railway." — The 
New  York  Times,  January  7,  1922. 


246  THE  SHANTUNG  QUESTION 

the  Chinese  delegates  agreed  to  this  abandonment  not 
without  due  sanction  from  the  Peking  Government. 
In  that  case,  the  Peking  Government  reversed  its  own 
position. 

At  the  first  few  meetings,  the  minor  issues,  such  as 
the  transfer  of  public  properties,  were  discussed  and 
disposed  of.  There  was  no  difficulty  in  reaching  a 
mutual  agreement.  For  some  time,  therefore,  the 
" conversations"  went  on  rather  smoothly,  promising 
all  hopes  for  an  early  agreement  which  would  remove 
the  Shantung  question  from  the  field  of  international 
controversy.  But  the  affair  was  not  to  be  plain  sail- 
ing. The  Chinese  and  Japanese  delegates  found 
themselves  quite  far  apart  in  their  viewpoints,  when 
they  began  to  discuss  the  administration  of  the  Kiao- 
chow-Tsinan  Railway,  which  was  really  the  heart  of 
the  entire  Shantung  dispute.  Apparently,  it  was  the 
intention  or  policy  of  the  Japanese  delegates  to  dis- 
pose of  the  minor  issues  first,  leaving  this  central 
problem  of  the  Kiaochow-Tsinan  Eailway  to  the  end. 
On  the  other  hand,  the  Chinese  delegates,  already 
overwhelmed  with  demands  for  an  immediate  settle- 
ment of  the  railway,  considered  it  unwise  to  take  up 
the  details  first  and  leave  to  the  very  end  this  railway 
question  which  would  in  no  small  measure  determine 
the  failure  or  success  of  the  negotiation.  The  Jap- 
anese delegates  were  finally  persuaded  to  accept  the 
Chinese  point  of  view,  and  at  the  ninth  meeting,  con- 
sented to  take  up  the  railway  question.  Thus, 
beginning  from  December  10,  1921,  the  "  conversa- 
tions" were  confined  to  the  disposition  of  this  railway, 
its  purchase  price,  its  future  administration  and  con- 
trol, and  the  way  in  which  the  price  was  to  be  paid. 


AT  THE  WASHINGTON  CONFERENCE         247 

The  " conversations"  resulted,  however,  in  nothing 
more  than  what  was  characterised  in  the  official  com- 
muniques as  an  "  interchange  of  views "  between  the 
two  delegations.  At  the  sixteenth  meeting,  held  on 
December  19,  signs  of  a  deadlock  became  visible  when 
the  Japanese  delegates  insisted  upon  their  proposal 
that,  in  consideration  for  the  restoration  of  the  rail- 
way, the  posts  of  the  chief  engineer,  chief  accountant, 
and  chief  traffic  manager  of  the  line  should  be  given 
to  Japanese  nationals.  It  seems  that  the  vantage 
point  where  the  Japanese  delegates  commenced  their 
" conversations"  was  that  the  Kiaochow-Tsinan 
Railway,  together  with  its  branches  and  appur- 
tenances, was  Japanese  property.  As  a  concession  to 
China,  they  proposed  to  make  the  railway  a  joint 
enterprise,  and  as  a  further  concession  to  China,  they 
now  agreed  to  sell  it  to  her,  at  the  value  assessed  by 
the  Interallied  Reparation  Commission,  which  is 
53,406,141  gold  marks.  But  they  insisted  that  there 
must  be  a  condition  to  this  sale:  Japan  should  be 
given  the  opportunity  to  retain  an  interest  in  the 
railway. 

There  might  be  a  thousand  and  one  ways  whereby 
Japan  could  retain  an  interest  in  the  railway.  But 
the  specific  ways  which  the  Japanese  delegates  pro- 
posed consisted  in  making  a  long-term  loan  to  China 
for  the  purchase  of  the  railway  and  appointing 
Japanese  subjects  to  the  posts  of  the  chief  engineer, 
chief  accountant,  and  chief  traffic  manager  of  the 
line  for  the  duration  of  the  loan. 

On  the  other  hand,  the  Chinese  delegates  announced 
that  China  was  ready,  through  a  Chinese  banking 
consortium,  to  buy  the  railroad  at  the  assessed  value 


248  THE  SHANTUNG  QUESTION 

and  to  conclude  the  deal  at  the  end  of  ninety  days. 
This  proposal  met  with  instant  rejection  by  the 
Japanese  delegates,  who  explained  that  such  a  pre- 
cipitated transfer  of  the  railway  would  injure 
Japan's  economic  interests  in  the  Shantung  province. 
In  order  to  meet  the  Japanese  objection,  the  Chinese 
delegates  brought  forth  a  new  proposal,  which  was 
to  pay  for  the  railway  in  installments  covering  a 
period  of  three  years.  The  Japanese  delegates  did 
not  object  to  the  proposal,  but  they  suggested  that  the 
installments  should  be  extended  to  cover  a  period  of 
twenty-three  years.  It  was,  of  course,  understood, 
that  during  this  period  Japan  was  to  have  her 
nationals  holding  the  posts  of  chief  engineer,  chief 
accountant,  and  chief  traffic  manager  of  the  railway. 
Japan's  ground  for  wishing  to  extend  the  period 
was  that  her  trading  interests  in  the  province  would 
be  adversely  affected  should  the  railway  be  suddenly 
or  immediately  returned  to  China.  Japanese  dele- 
gates went  even  so  far  as  to  intimate  that  it  was  their 
suspicion  that  if  they  should  accept  cash  payment  for 
the  road  or  agree  to  a  short  period  in  which  China  was 
to  pay  the  installments,  China  would  discriminate 
Japanese  traders  along  the  railway.  The  period  was 
later,  upon  China's  objection,  reduced  to  twenty 
years. 

The  Chinese  delegates  could  not,  of  course,  accept 
such  a  proposal.  They  insisted  upon  their  offer  to 
take  over  the  railway  at  once  and  pay  for  it  by  install- 
ments within  three  years.  This  insistence  brought 
forth  a  sharp  question  from  the  Japanese  delegates 
who  pointed  out  that  China's  present  indebtedness 
to  Japan  amounting  to  over  two  hundred  millions 


AT  THE  WASHINGTON  CONFERENCE         249 

had  not  yet  been  paid,  and  asked  what  security  China 
could  offer  for  cash  payment  for  the  railway. 

At  the  seventeenth  meeting,  held  on  December  20, 
the  question  of  payment  and  that  of  employing 
Japanese  nationals  in  administrative  positions  of 
the  railway  were  again  discussed.  Besides  the  plan 
of  payment  in  cash,  the  Chinese  delegates  offered 
an  alternative  plan,  which  was  to  pay  for  the  railway 
in  six  installments  at  intervals  of  six  months  each,  the 
first  to  be  made  in  cash  and  the  remaining  five  to  be 
made  in  Chinese  Government  Treasury  Notes  secured 
by  revenues  of  the  railway.  The  Chinese  delegates 
also  offered  to  pay  interest  at  a  reasonable  rate  upon 
the  deferred  payments,  and  were  ready  to  give  a 
categorical  assurance  that  in  the  operation  of  the 
railway  after  its  restoration  to  China  there  would 
be  no  discrimination  against  traders  of  any  foreign 
nationality. 

Taking  up  the  question  of  cash  payment,  the 
Japanese  delegates  once  more  raised  the  point  as  to 
China's  ability  to  pay.  They  once  more  asked  what 
assurance  they  could  have  that  China  would  pay  if 
the  road  were  turned  back.  They  considered  it 
necessary  that,  in  the  case  of  cash  payment,  32,000,000 
Mexican  dollars  should  be  deposited  in  a  neutral  bank 
before  the  transfer  of  the  railway  took  place.  The 
Chinese  delegates  objected  to  making  a  single  deposit 
of  this  huge  sum  for  the  reason  that  it  would  disturb 
the  money  market  in  China  and  that  it  would  entail 
upon  China  a  considerable  loss  of  interest.  They 
suggested,  however,  to  extend  the  period  of  cash  pay- 
ment from  three  to  nine  months,  and  to  make  deposits 
in  a  neutral  bank  every  three  months.  Minister  Sze 


250  THE  SHANTUNG  QUESTION 

made  the  concrete  proposal  that  two-fifths  of  the 
amount  could  be  deposited  in  a  neutral  bank  at  the 
end  of  the  first  three  months  after  the  conclusion  of 
the  Shantung  settlement,  that  at  the  end  of  another 
three  months  another  fifth  should  be  deposited,  and 
that  the  remaining  two-fifths  should  be  paid  in  at  the 
end  of  nine  months  after  the  conclusion  of  the  Shan- 
tung agreement.  This  proposal  was  made  in  accord- 
ance with  the  tentative  understanding  reached  be- 
tween the  Chinese  and  Japanese  delegations  that  the 
transfer  of  the  railway  was  to  be  effected  within  nine 
months.  But  the  Japanese  delegates  refused  to 
accept  the  proposal,  on  the  ground  that  it  did  not 
furnish  the  necessary  guarantee  for  the  payment  by 
China  of  the  remaining  three-fifths  into  the  neutral 
bank  after  the  transfer  of  the  railway  property  had 
begun,  and  that  any  attempt  by  China  to  raise  the 
necessary  fund  to  meet  her  obligations  would  arouse 
the  sentiment  of  her  people  against  Japan.  The 
Chinese  delegates  emphasised  the  necessity  that 
Japan  should  have  a  certain  amount  of  confidence  in 
China's  ability  to  pay,  and  pointed  out  that  even  in 
ordinary  business  transactions  nothing  could  be 
accomplished  if  the  business  men  were  without  some 
degree  of  confidence  in  each  other's  good  faith.  But 
the  Japanese  delegates  stood  on  their  ground.  They 
insisted  that,  if  the  plan  of  cash  payment  were 
accepted,  the  entire  amount  would  have  to  be  de- 
posited in  a  neutral  bank  prior  to  the  transfer  of  the 
railway  and  its  appurtenant  properties. 

Referring  to  the  installment  plan,  which  the  Jap- 
anese delegates  accepted  "in  principle,"  they  wanted 
to  know  what  security  they  could  have  for  future  pay- 


AT  THE  WASHINGTON  CONFERENCE         251 

ments.  When  offered  with  Chinese  Government 
Treasury  Notes  or  the  notes  of  the  Chinese  Bankers' 
Union  as  security,  the  Japanese  delegates  asked  what 
security  could  be  offered  for  the  notes.  To  this,  the 
Chinese  delegates  readily  replied  that  the  notes  could 
be  secured  on  the  property  and  the  revenue  of  the 
railway.  But  the  Japanese  still  fell  back  upon  their 
early  proposal  that  the  period  of  payment  should  be 
extended  to  twenty  years,  so  that  Japan  could  retain 
an  interest  in  the  railway.  In  order  to  meet  the 
Japanese  desire  more  than  half  way,  the  Chinese 
delegates  finally  offered  to  spread  the  payments  over 
a  period  of  ten  years,  with  the  option  to  make  a  final 
settlement  after  three  years.  As  a  counter-proposal, 
the  Japanese  suggested  five  years  as  the  option  period. 
Seeing  that  it  was  only  two  years  longer  than  their 
original  proposal,  the  Chinese  delegates  suggested,  as 
a  further  compromise,  that  two  years  could  be  added, 
not  to  the  option  period,  but  to  the  full  term  of  ten 
years,  thus  spreading  the  payments  over  twelve  years. 
This  proposal  was  also  declined  by  the  Japanese. 

The  Japanese  delegates  then  suggested  that  Japan 
should  have  an  interest  in  the  road  on  the  same  or 
similar  terms  as  other  foreign  Powers  having  inter- 
ests in  Chinese  railways  built  by  foreign  capital.  In 
plain  words,  they  wanted  China  to  make  a  loan 
from  Japan,  running  from  twenty  to  thirty  years, 
with  which  to  pay  for  the  railway,  so  that  the  Jap- 
anese capitalists  would  be  placed  on  an  equal  footing 
with  American,  Belgium,  British  and  other  foreign 
capitalists  with  respect  to  Chinese  railway  loans. 
The  Chinese  delegates  pointed  out,  however,  that 
the  Kiaochow-Tsinan  Railway  could  not  be  placed 


252  THE  SHANTUNG  QUESTION 

on  exact  parity  with  other  foreign-built  railways  in 
China.  Most  railway  loans,  running  from  twenty  to 
forty  years,  were  contracted  for  the  roads  yet  to  be 
built.  In  view  of  the  fact  that  the  construction  might 
take  more  than  ten  years,  the  long-term  loans  were 
not  only  wise,  but  also  necessary.  The  Kiaochow- 
Tsinan  Railway  has  been  built  and  in  operation  for 
twenty  years.  The  necessity  for  a  long-term  loan, 
therefore,  does  not  exist.  In  the  case  of  new  railways 
being  or  to  be  constructed,  their  earning  power  could 
not  be  definitely  ascertained  beforehand.  On  the 
other  hand,  the  earning  capacity  of  the  Kiaochow- 
Tsinan  Railway  is  well-known  and  its  annual  revenue 
can  be  counted  upon  for  paying  off  the  purchase 
price.  And  besides,  the  Kiaochow-Tsinan  Railway 
was  built  with  Chinese  and  German  capital,  not  Jap- 


anese.* 


Another  contention  which  the  Japanese  delegates 
refused  to  yield  was  that  the  chief  engineer,  chief 
accountant,  and  chief  traffic  manager  of  the  railway 
should  be  Japanese.  It  was  entirely  out  of  the  ques- 
tion that  China  could  ever  consider  such  an  outrage- 
ous proposition.  To  accept  this  claim  would  be  tanta- 
mount to  buying  back  the  railway  only  to  hand  it 
to  Japanese  control.  The  Chinese  delegates,  ani- 
mated as  they  were  by  a  true  spirit  of  compromise 
and  an  earnest  desire  for  early  settlement,  were, 
however,  sufficiently  reasonable  as  to  offer  to  appoint 
a  Japanese  district  engineer,  a  Japanese  associate 
accountant,  and  a  Japanese  associate  traffic  manager 


*  The  Kiaochow-Tsinan  Railway  was  built,  operated,  and  owned  by  a 
Chinese-German  company,  chartered  in  Berlin,  in  which  the  Chinese  had 
no  less  than  360  shares  of  1,000  gold  marks  each. 


AT  THE  WASHINGTON  CONFERENCE         253 

on  the  railway.  The  fairness  of  the  offer  was 
apparent,  but  the  Japanese  refused  to  accept  it. 

It  is  thus  evident  that  the  Japanese  delegates 
refused  to  recede  a  single  step.  They  seemed  to  be 
fully  determined  that  if  the  railway  question  was  to 
be  settled  it  should  be  settled  according  to  their  terms. 
With  the  Chinese  delegates  refusing  to  concede  any 
further,  and  with  the  views  of  the  two  delgations  so 
wide  apart,  there  could  be  no  progress  in  the  "  con- 
versations. ' '  The  Japanese  delegates  announced  that 
they  "  could  not  recommend  any  settlement  of  the 
railway  question."  Mr.  Hanihara,  in  a  formal  state- 
ment read  on  their  behalf,  announced  their  decision 
to  discontinue  the  " conversations,"  leaving  the  ques- 
tion to  Tokio  for  settlement.  In  the  official  com- 
munique, issued  at  the  conclusion  of  the  (seven- 
teenth) meeting,  it  was  declared  that  the  question 
regarding  the  mode  of  payment  and  the  employment 
of  Japanese  experts  in  the  service  of  the  railway 
involved  many  difficult  points  "on  which  it  was  found 
necessary  for  the  Japanese  delegation  to  consult  its 
home  Government."  The  meeting  was  adjourned 
sine  die,  "pending  receipt  of  instructions  by  the 
Japanese  delegation  from  Tokio."  The  decision  by 
the  Japanese  delegations  to  suspend  the  Shantung 
"conversations"  was  thus  disguised  as  a  case  of  wait- 
ing for  instructions  from  their  home  Government. 

In  the  absence  of  adequate  publicity,  the  suspen- 
sion of  the  Shantung  "conversations"  became  at  once 
a  fruitful  source  of  journalistic  speculation.  It  was 
hinted  in  certain  quarters  that  China  was  responsible 
for  the  break,  as  she  was  anxious  to  end  the  direct 
"conversations"  and  bring  the  Shantung  question 


254  THE  SHANTUNG  QUESTION 

before  the  Conference.  Those  who  were  better 
informed  of  the  situation  knew  at  once  that  the  Jap- 
anese delegates  were  playing  for  time. 

Strong  suspicion  existed  at  the  time  that  the  sud- 
den decision  of  the  Japanese  delegates  to  suspend  the 
Shantung  "  conversations "  was  largely  due  to  the 
desire  on  the  part  of  the  Tokio  Government  to  avail 
itself  of  the  opportunity  for  direct  negotiation  with 
the  Peking  Government,  which  the  fall  of  the  Chinese 
cabinet,  headed  by  General  Chin  Yung-pang,  and  the 
organisation  of  a  new  cabinet  by  Liang  Shih-yi, 
seemed  to  promise.  On  December  25,  1921,  the  new 
cabinet  assumed  office.  Conversations  on  the  Shan- 
tung question  took  place  between  Liang  Shih-yi,  the 
new  Premier,  and  Mr.  Obata,  the  Japanese  Minister 
in  Peking,  on  the  occasion  of  the  Japanese  diplomat's 
official  call.  This  interview  gave  birth  to  a  crop  of 
rumours  that  Japan,  just  as  she  had  done  during  the 
Versailles  Peace  Conference,*  sought  to  bring  pres- 
sure to  bear  upon  the  Peking  Government  to  force 
a  settlement  over  the  heads  of  its  representatives 
at  the  Washington  Conference.  It  was  vigorously 
asserted,  and  equally  vigorously  denied,  that  the 
Peking  Government,  under  the  new  cabinet,  had 
yielded  to  the  Japanese  Minister  and  had  instructed 
its  representatives  at  the  Washington  Conference  to 
accept  the  Japanese  proposal  of  a  railway  loan, 
together  with  the  condition  of  employing  Japanese 
nationals  to  be  the  chief  engineer,  chief  accountant, 
and  chief  traffic  manager  of  the  Shantung  railway. 
In  the  absence  of  documentary  proof,  it  is  difficult 

*  Vide  Note  II,  Chapter  X. 


AT  THE  WASHINGTON  CONFERENCE         255 

either  to  affirm  or  to  deny  the  report.  The  Chinese 
delegates  refused  to  comment  on  the  matter  publicly, 
and  for  a  while,  they  maintained  silence,  which  was 
interpreted  as  an  eloquent  affirmation  of  the  truthful- 
ness of  the  report.  Whatever  might  be  the  case,  it 
may,  however,  be  safely  said  that  the  report  of  direct 
negotiation  at  Peking  was  responsible  for  a  number 
of  strong-worded  telegrams  circulated  by  some  of 
the  prominent  political  leaders  in  China,  and  caused 
a  painful  searching  of  heart  among  the  Chinese  dele- 
gates themselves.  It  may  also  be  safely  said  that  the 
suspension  of  the  Shantung  "  conversations "  at 
Washington  was  clearly  due  to  the  desire  on  the  part 
of  the  Japanese  Government  to  postpone  action  and 
to  await  political  developments  in  Peking. 

For  exactly  two  weeks,  the  " conversations"  were 
suspended  in  order  to  give  the  Japanese  delegates 
ample  time  to  consult  their  home  Government. 
While  a  cable  message  to  Tokio  would  not,  in  ordi- 
nary cases,  take  more  than  twenty-four  hours,  the 
Japanese  took  days  and  weeks  to  exchange  messages 
across  the  Pacific.  The  Chinese  delegates  waited,  as 
Minister  Sze  put  it,  " patiently  and  impatiently." 
And,  finally,  on  January  3,  1922,  the  Japanese  dele- 
gates informed  the  American  and  the  British  "  ob- 
servers" that  they  had  received  due  instructions  from 
home  and  were  ready  to  proceed  with  the  "  conversa- 
tions." 

On  January  4,  the  " conversations"  were  resumed 
only  to  break  off  once  again.  The  Chinese  delegates 
now  offered  to  make  the  cash  payment  with  a  single 
deposit  in  a  neutral  bank  either  before  or  at  the  time 
when  the  transfer  of  the  railway  was  to  be  effected. 


256  THE  SHANTUNG  QUESTION 

The  Japanese  delegates  were,  however,  as  insistent 
as  ever  before  upon  their  demands,  refusing  every 
offer  of  compromise  which  would  make  possible  an 
amicable  and  early  settlement  of  the  question.  At 
the  nineteenth  meeting,  held  on  January  5,  the  Jap- 
anese delegates,  in  no  uncertain  language,  still 
insisted  that  they  desired  to  make  the  Kiaochow- 
Tsinan  Railway  a  joint  enterprise  with  the  Chinese 
Government.  Inasmuch  as  this  plan  was  not  accept- 
able to  China,  they  were  now  prepared  "to  give  the 
title"  of  the  railway  and  its  appurtenances  to  China, 
retaining  at  the  same  time  some  interest  in  the  line. 
They  even  went  back  upon  their  own  words  by 
refusing  to  admit  what  they  had  previously  agreed  to 
"in  principle":  they  refused  to  sell  the  property  to 
China,  and  held  that  it  was  not,  therefore,  a  question 
of  how  to  pay  for  it.  Baron  Shidehara,  one  of  the 
Japanese  delegates  engaged  in  the  "conversations," 
reiterated  that,  inasmuch  as  the  plan  of  joint  enter- 
prise was  not  acceptable  to  China,  the  Japanese 
Government  now  desired  a  railway  loan  along  the 
lines  of  the  railway  loan  agreements  of  1913 
and  1914. 

In  its  attempt  to  meet  the  wishes  of  the  Japanese 
Government,  the  Chinese  delegates  had,  indeed, 
exhausted  their  "ingenuity"  and  done  everything 
that  was  within  their  power  to  do.  Upon  Baron 
Shidehara 's  reiteration  of  the  desire  of  the  Japanese 
Government  for  a  long-term  railway  loan  to  China, 
Minister  Koo,  one  of  the  Chinese  delegates  engaged 
in  the  Shantung  negotiations,  read  the  following 
statement  as  China's  "final  formula"  for  the  solution 
of  the  railway  question : 


AT  THE  WASHINGTON  CONFERENCE         257 

"If  you  are  prepared  to  waive  the  idea  of  a  Japanese  loan, 
we  are  ready  to  consider  the  suggestion  on  the  basis  of  our  plan 
of  deferred  payment  in  general  harmony  with  the  substance  of 
the  railway  agreements  now  in  existence  but  without  the  form 
of  a  loan  and  within  the  limits  of  keeping  the  railway  under  full 
Chinese  control,  operation  and  management  as  you  have  stated 
to  be  your  desire  on  more  than  one  occasion. ' ' 


In  other  words,  the  Chinese  delegates  were  ready 
to  consider  spreading  the  payments  to  as  long  a 
period  as  is  usually  provided  for  in  the  long-term 
railway  loan  agreements,  if  this  could  be  done  "  with- 
out the  form  of  a  loan"  and  at  the  same  time  " keep- 
ing the  railway  under  full  Chinese  control,  operation 
and  management." 

The  Japanese  delegates  were  still  insistent.  They 
said  that  they  "  could  not  entertain  much  hope  that 
the  Japanese  Government  would  abandon  its  plan  of 
a  railway  loan  agreement,"  and  asked  for  an  adjourn- 
ment so  as  to  give  more  careful  consideration  to  the 
" final  Chinese  formula." 

It  was  in  this  connection  that  the  Chinese  delegates, 
feeling  that  they  had  done  their  very  best  to  meet 
the  wishes  of  the  Japanese  Government,  asked 
u  whether  some  other  means  of  reconciling  the  views 
of  the  two  delegations  should  not  be  sought"  and 
intimated  that  "  perhaps  Mr.  Hughes  or  Mr.  Balfour 
might  be  able  to  point  out  a  new  way  by  which  the 
question  of  the  railway  could  be  settled  without  un- 
necessary delay."  Minister  Sze  remarked,  appar- 
ently not  without  feeling,  that  since  the  Chinese  and 
Japanese  delegates  were  so  wide  apart  in  their  pro- 
posals, he  doubted  "whether  any  useful  purpose  could 
be  served  by  further  prolonging  the  discussion  with- 


258  THE  SHANTUNG  QUESTION 

out  securing  the  aid  of  the  friendly  offices  that  had 
been  offered  by  Mr.  Hughes  and  Mr.  Balfour." 

At  the  twentieth  meeting,  held  January  6,  Baron 
Shidehara  said  that  the  Japanese  delegation  had 
examined  the  " final  Chinese  formula"  and  had  found 
it  unacceptable.  "Then,"  according  to  the  confiden- 
tial minutes  taken  of  the  Shantung  "conversations," 
"apparently  disregarding  all  the  discussions  that 
had  been  had  as  to  modifications  of  the  various  plans 
that  had  been  proposed  by  the  Chinese  delegation, 
Baron  Shidehara  made  the  statement  that  Japan 
would  not  be  able  to  agree  to  any  proposition  what- 
ever short  of  a  railway  loan  agreement  along  the 
line  of  other  railway  loan  agreements  with  foreign 
nations  in  recent  years,  as,  for  instance,  in  the  years 
1913  and  1914."  To  make  the  Japanese  position 
clear,  Baron  Shidehara  stated  the  following  terms 
of  settlement,  which  were  later  given  out  in  the  com- 
munique to  the  press : 


' '  1.  The  terms  of  the  loan  shall  be  fixed  at  fifteen  years  while 
China  shall  retain  an  option  of  redeeming  the  whole  outstanding 
liabilities  upon  six  months'  notice  after  five  years  from  date  of 
agreement. 

"2.  A  Japanese  Traffic  Manager  and  Chief  Accountant  shall 
be  engaged  in  the  service  of  the  Shantung  Railway. 

"3.  The  details  of  the  financial  arrangement  shall  be  worked 
out  at  Peking  between  the  representatives  of  the  two  parties  to 
the  loan." 


As  to  the  proposal  of  the  Chinese  delegates  to  invite 
Mr.  Hughes  and  Mr.  Balf  our  to  be  present  at  the  next 
meeting,  Baron  Shidehara  stated  that,  while  not 
objecting  to  their  presence,  the  Japanese  delegation 


AT  THE  WASHINGTON  CONFERENCE         259 

was  not  willing  to  invite  them.  "  Instructions  from 
Tokio,"  he  said,  "were  explicit  as  regards  the  railway 
loan  agreement"  and  therefore,  "the  Japanese  dele- 
gation was  not  in  a  position  to  request  the  good 
offices  of  Mr.  Hughes  and  Mr.  Balfour." 

With  the  Japanese  delegates  thus  refusing  to  move 
a  single  step  to  meet  the  proposals  presented  by  the 
representatives  of  China,  the  "  conversations "  on  the 
Shantung  question  were  once  more  brought  to  an 
impasse.  The  Japanese  delegates  moved  for  adjourn- 
ment of  the  meeting;  the  British  and  American 
"observers"  at  these  "conversations"  asked  for  the 
opportunity  to  report  the  situation  to  their  respective 
chiefs ;  and  the  Chinese  delegates,  having  exhausted 
their  ingenuity  to  meet  the  wiles  of  Japanese  diplo- 
mats, threw  up  their  hands  and  considered  the  case 
hopeless.  But  for  the  sake  of  record,  the  positions  of 
the  two  delegations  should  be  made  clear.  Thus,  on 
behalf  of  China,  Minister  Koo  summarised  the  situa- 
tion as  follows : 


Both  the  two  Chinese  alternative  plans  were  still  available. 
On  the  one  hand,  the  Chinese  delegation  were  disposed  to  effect 
a  cash  payment  with  a  single  deposit  on  a  specified  date,  if  that 
was  preferred  by  the  Japanese  delegation.  On  the  other  hand,  in 
view  of  the  earnest  desire  on  the  part  of  the  Japanese  delegation 
to  retain  an  interest  in  the  railway,  the  Chinese  delegation  were 
still  prepared  to  offer  either  Treasury  Notes  or  the  notes  of  the 
Chinese  Bankers'  Union,  together  with  the  undertaking  that  the 
Chinese  Government  would  select  and  employ  a  Japanese  Dis- 
trict Engineer  during  the  period  when  the  deferred  payment  had 
not  been  completed. 

The  Chinese  Delegation  understood  that  the  Japanese  Delega- 
tion would  not  accept  either  of  those  two  alternative  plans  and 
insisted  on  the  plan  of  a  Japanese  railway  loan  agreement.  The 
Chinese  delegates  had,  on  more  than  one  occasion,  explained  the 


260  THE  SHANTUNG  QUESTION 

reasons  why  China  herself,  in  the  interest  of  the  friendship  and 
good  neighbourhood  of  the  two  countries,  as  well  as  the  peoples, 
could  not  accept  the  plan  of  a  railway  loan  agreement.  They  had 
been  so  clearly  stated  that  he  thought  it  unnecessary  to  recapitu- 
late them  here.  In  view  of  the  difficulties  confronting  the  two 
delegations,  he  could  not  better  describe  the  situation  the  two 
delegations  had  reached  than  by  using  the  term  "impasse." 

In  view  of  the  circumstances,  the  Chinese  delegation  had  sug- 
gested to  refer  the  question  to  Mr.  Hughes  and  Mr.  Balf our,  who 
had  placed  at  the  disposal  of  the  two  delegations  their  good 
offices.  He  understood  that  the  Japanese  delegates  were  not 
able  to  utilise  their  good  offices  at  the  present  moment.  In  view 
of  the  sentiments  of  the  Japanese  delegates,  the  Chinese  delga- 
tion  suggested  as  an  alternative  to  ask  Mr.  Hughes  and  Mr. 
Balf  our  to  join  the  two  delegations  in  the  meeting  so  that  they 
might  be  in  a  position  to  suggest  a  middle  way  between  the 
Chinese  and  Japanese  proposals.  This  suggestion  was  again 
found  inacceptable  to  the  Japanese  delegation.  In  view  of  this 
situation,  the  Chinese  delegation  could  not  see  in  what  manner 
the  discussion  of  the  question  could  be  expedited.  They  under- 
stood that  it  was  the  desire  of  the  Japanese  delegates  to  have  a 
meeting  next  Monday.  As  the  Conference  was  drawing  to  a 
close,  the  Chinese  delegation  did  not  want  to  leave  this  question 
unsettled.  They,  therefore,  felt  at  a  loss  to  understand  the  pre- 
cise position  of  the  Japanese  delegation.  At  the  meeting  of 
yesterday,  the  Chinese  delegates  had  made  the  suggestion  that 
the  good  offices  of  Mr.  Hughes  and  Mr.  Balf  our  should  be  availed 
upon,  but  in  deference  to  the  desire  of  the  Japanese  delegation 
they  consented  to  leave  the  question  to  be  considered  over  night. 
At  this  meeting  the  Chinese  delegation  noticed  that  since  the 
date  of  December  20th  if  any  change  had  taken  place  at  all,  in 
the  attitude  of  the  Japanese  delegation,  it  was  that  they  had 
taken  up  a  position  which  was  maintained  at  an  earlier  stage  of 
this  negotiation.  It  was  hardly  necessary  for  the  Chinese  dele- 
gates to  add  that  the  Japanese  view  of  the  good  offices  extended 
by  Mr.  Hughes  and  Mr.  Balfour  was  one  which  the  Chinese 
delegates  could  not  share,  especially  when  it  was  so  clearly 
recorded  in  the  minutes  prepared  by  the  Japanese  delegation. 

In  view  of  the  circumstances,  they  desired  to  have  the  Chinese 
position  clearly  recorded  in  the  minutes.  After  having  clearly 
stated  their  position,  they  had  no  objection  to  adjourn  this 
meeting. 


AT  THE  WASHINGTON  CONFERENCE         261 

Baron  Shidehara  stated,  in  turn,  Japan's  position, 
which  was  recorded  in  the  minutes  of  the  "  conversa- 
tions" in  the  following  language : 

He  had  already  defined  the  position  of  the  Japanese  delegation. 
They  had  submitted  definite  terms  for  a  settlement  of  this  ques- 
tion. It  was  not  necessary  for  him  to  repeat  those  proposals. 
He  desired  only  to  point  out  one  or  two  things  which  had  been 
just  mentioned  by  Mr.  Koo.  He  stated  that  the  Japanese  delega- 
tion had  now  reverted  to  a  proposal  which  they  had  previously 
abandoned.  That  was  what  he  had  gathered  from  the  remarks 
of  Mr.  Koo.  That  was  not  the  case.  He  wished  to  say  that  in 
no  case  of  the  negotiation  the  Japanese  had  abandoned  the  plan 
of  a  railway  loan  agreement.  They  had  discussed  the  Chinese 
plans,  but  he  reminded  his  Chinese  colleagues  that  the  Japanese 
delegation  never  gave  up  their  plan  of  a  railway  loan  agreement. 
As  stated,  by  Mr.  Koo,  that  since  the  resumption  of  this  conversa- 
tion the  Chinese  delegation  had  made  new  concessions.  They 
were  new  proposals,  but  not  concessions. 

Regarding  the  good  offices  of  Mr.  Hughes  and  Mr.  Balfour 
he  had  stated  that  the  instructions  to  the  Japanese  delegation 
on  the  plan  of  a  railway  loan  agreement  were  definite  and 
explicit  and  in  the  present  situation  the  Japanese  delegates  could 
not  go  farther  than  the  terms  of  those  instructions.  In  that 
situation,  they  did  not  feel  at  liberty  to  request  the  good  offices 
of  these  gentlemen.  They  could  not  ignore  the  expressed  instruc- 
tions from  their  Government,  but  on  the  other  hand  they  had 
not  abandoned  the  idea  of  finding  some  way  of  settling  this 
question.  The  Japanese  delegation  had  proposed  to  adjourn 
this  meeting  and  to  meet  again  next  Monday. 

Regarding  the  participation  of  Mr.  Hughes  and  Mr.  Balfour 
in  this  meeting,  he  had  no  objection  to  their  presence,  but  he 
wished  to  express  his  doubt  whether  they  would  be  disposed  to 
come  without  expressed  request  from  the  two  parties.  Hitherto 
they  had  avoided  any  appearance  of  intervention.  If  one  party 
should  request  them  to  participate,  but  not  the  other  party, 
he  thought  that  it  might  be  embarrassing  to  those  two  gentlemen. 
He  wished  to  state  again  he  had  no  objection  to  their  presence. 

As  soon  as  the  Chino- Japanese  " conversations" 
struck  a  reef,  Mr.  Hughes  and  Mr.  Balfour  hastened 


262  THE  SHANTUNG  QUESTION 

to  save  them  from  being  shipwrecked.*  They  offered 
what  was  then  styled  as  a  " compromise  formula"  for 
the  settlement  of  the  Kiaochow-Tsinan  Railway  dis- 
pute, which  would  on  the  one  hand  satisfy  Japan  in 
the  matter  of  appointing  Japanese  experts  in  the 
responsible  positions  of  the  railway  administration, 
and  China  on  the  other  in  regard  to  the  mode  of  pay- 
ment. While  the  suggested  formula  was  referred  to 
Peking  and  Tokio  for  opinion,  the  Chinese  and  the 
Japanese  delegates  resumed  " conversations,"  Jan- 
uary 11,  on  the  " collateral  issues,"  such  as  the 
withdrawal  of  Japanese  troops  in  Shantung,  the 
opening  of  the  leased  territory  to  international  trade, 
the  extension  of  the  Shantung  railways,  the  control 
and  the  operation  of  the  mines,  of  the  salt  fields,  and 
of  the  German  cable.  These  minor  questions  were 
disposed  of  without  much  difficulty. 

Eight  in  the  midst  of  these  " conversations,"  the 
Shantung  question  was  injected  into  the  United 
States  Senate.  On  January  20,  1922,  Senator  Walsh 
of  Montana,  offered  a  resolution,!  which,  after  recit- 
ing the  history  of  the  question,  called  upon  the  Presi- 
dent to  communicate  to  the  Senate  the  necessary 
information  about  the  progress  of  the  negotiation.  A 
clash  of  debate  followed  the  resolution,  which  threw  a 
sudden  but  needed  light  on  the  Chino-Japanese 
" squabbling."  There  had  been  a  good  deal  of  public 
impatience  about  the  Shantung  " conversations,"  in 

*  During  the  deadlock,  Minister  Sze,  in  a  conference  with  the  press, 
said  that  "new  avenues"  of  settlement  were  being  explored.  Asked  as 
to  what  they  were,  he  replied:  "Pennsylvania  Avenue,  Massachusetts 
Avenue,  and  Connecticut  Avenue."  The  State  Department  and  the  White 
House  are  located  on  Pennsylvania  Avenue,  the  Chinese  and  the  Japanese 
delegations  on  Massachusetts  Avenue,  and  the  British  Embassy  and  Mr. 
Balfour's  residence  on  Connecticut  Avenue. 

f  Vide  Chapter  XII  and  Appendix  O. 


AT  THE  WASHINGTON  CONFERENCE         263 

which  an  effort  had  apparently  been  made  by  the  Jap- 
anese "to  explore  the  tangle  of  details. "  The  Senate 
resolution  was  perhaps  but  one  of  the  reflections  of 
public  impatience  about  the  Shantung  delay,  and  had 
the  desired  effect  of  speeding  up  the  Chino- Japanese 
"  conversations/' 

The  chief  of  the  Chinese  delegation  at  the  Wash- 
ington Conference  is  a  man  of  great  resource.  He 
made  use  of  every  trump  card  that  was  available. 
Dr.  Sao-ke  Alfred  Sze,  Chinese  Minister  to  the 
United  States  and  China's  chief  delegate  at  the  Con- 
ference, brought  the  Shantung  question  from  the 
Pan-American  Union  to  the  White  House.  He  called 
upon  President  Harding  on  January  25,  1922,  to 
discuss  the  possible  terms  of  settlement.  It  may  be 
recalled  that  President  Harding 's  views  on  the  Shan- 
tung question  were  quite  pronounced.  The  mere  fact 
that  they  conferred  was  sufficient  to  stir  up  the  diplo- 
matic dovecote  in  Washington.  It  was,  however, 
rather  unfortunate  that  the  conference  gave  birth 
to  misleading  reports.  It  was  asserted  that  Presi- 
dent Harding  had  brought  pressure  to  bear  upon  the 
Chinese  delegation  to  accept  the  Japanese  terms.  It 
was  also  reported  that  President  Harding  had  sent 
for  the  Chinese  delegate  in  order  to  lay  before  him 
proposals  for  settling  the  railway  question.  Nothing 
was  farther  from  the  truth.  The  truth  was  that 
the  interview  was  sought  by  Minister  Sze,  who  was 
desirous  of  laying  before  the  Chief  Magistrate  of  the 
United  States  China's  exact  position  on  the  Shan- 
tung question.  It  was  perhaps  not  alien  to  his  origi- 
nal purpose  to  seek  the  President's  influence  for  a 
fair  and  equitable  settlement. 


264  THE  SHANTUNG  QUESTION 

At  the  thirty-fourth  meeting  of  the  Chinese  and 
Japanese  delegates  relative  to  the  Shantung  question, 
held  on  January  30, 1922,  the  discussion  on  the  Kiao- 
chow-Tsinan  Railway  was  resumed,  both  delegations 
having  heard  from  their  respective  Governments  on 
the  Hughes-Balf our  ' 6  compromise  formula. ' '  At  the 
thirty-fifth  meeting,  held  on  January  31,  an  agree- 
ment was  reached  on  all  essential  points  in  regard  to 
the  railway.  The  terms  of  settlement,  which  were  in 
the  nature  of  a  compromise,  include  the  transfer  of 
the  railway  within  nine  months  after  the  day  it  comes 
into  force,  the  reimbursement  by  China  of  the 
assessed  value  of  53,406,141  gold  marks,  with  allow- 
ance for  improvements  and  depreciation,  and  the 
appointment  of  a  Japanese  traffic  manager  and  a 
Japanese  chief  accountant,  to  be  "under  the  direc- 
tion, control  and  supervision  of  the  Chinese  Man- 
aging Director"  of  the  railway.  The  reimbursement 
is  to  be  made  by  Chinese  Government  Treasury  Notes, 
secured  on  the  property  and  the  revenue  of  the  rail- 
way, good  for  fifteen  years,  but  redeemable  at  the 
end  of  five  years  upon  six  months'  notice.  The  Jap- 
anese traffic  manager  and  chief  accountant  will  be 
retained  only  for  "so  long  a  period  as  any  part  of  the 
said  Treasury  Notes  shall  remain  unredeemed." 

These  terms  were  embodied  in  the  Shantung  agree- 
ment which  was  signed  on  February  4  by  the  Chinese 
and  the  Japanese  delegates  at  the  Washington  Con- 
ference. An  eye-witness  said :  "Nothing  could  have 
been  more  spectacular  and  impressive  than  the  scene 
of  the  signing  of  the  Treaty  when  the  two  mediators 
(Mr.  Hughes  and  Mr.  Balfour)  sat  at  the  end  of  the 
long  table  in  the  main  hall  of  the  Pan-American 


AT  THE  WASHINGTON  CONFERENCE         265 

Building  watching  smilingly  the  two  delegations  at 
work."  The  agreement  was  announced  by  Mr. 
Hughes  at  the  fifth  Plenary  Session  of  the  Con- 
ference, February  1,  1922.  Thus  the  settlement  of 
the  Shantung  question  which  was  technically  outside 
of  the  Conference  was  made  a  part  of  the  Conference 
record. 


XIX 

THE  NEW  SHANTUNG  SETTLEMENT 

THE  settlement  of  the  Shantung  question  has 
been  counted  among  the  principal  achieve- 
ments of  the  Washington  Conference.  Though 
not  officially  taken  up  by  the  Conference  itself,  for 
the  reasons  which  we  have  stated  in  a  previous  chap- 
ter, and  though  the  " conversations"  between  the 
Chinese  and  the  Japanese  delegates  were  considered 
strictly  outside  the  Conference,  the  Shantung  ques- 
tion formed  as  much  a  part  of  the  Conference  as  the 
limitation  of  naval  armament.  Parodoxical  as  it 
may  sound,  it  remains  nevertheless  true  that  the 
Washington  Conference  would  be  a  half-success  or 
half -failure  if  the  Shantung  question  were  not  set- 
tled in  conjunction  with  it.  It  was  perfectly  apparent 
prior  to  the  meeting  of  the  Conference  in  Washington 
that'  it  could  ill  afford  not  to  take  up  this  one  question, 
which  has  been  for  the  last  few  years  a  disturbing 
factor  in  the  political  situation  of  the  Far  East. 
Having  found  out  that  most  of  the  Powers  at  the 
Conference  preferred  to  have  the  matter  straightened 
out  between  the  Chinese  and  the  Japanese  them- 
selves, the  novel  procedure  of  international  negotia- 
tion was  resorted  to,*  which  made  it  possible  for  the 

*  The  procedure  is  unusual,  but  not  unprecedented.  Thus,  in  1906, 
Mexico  and  the  United  States  suggested  direct  negotiations,  to  terminate 
the  war  between  Salvador  and  Honduras  on  the  one  side  and  Guatemala 
on  the  other.  The  suggestion  was  accepted,  and  the  negotiations  for 

266 


THE  NEW  SETTLEMENT  267 

Chinese  and  the  Japanese  delegates  to  begin  direct 
" conversations"  without  the  appearance  of  " direct 
negotiations,"  in  the  full  view  of  the  Conference  and 
yet  outside  of  it.  It  was  as  good  as  assured  that  these 
'  *  conversations ' '  could  not  fail.  Failure  of  the  Shan- 
tung " conversations"  would  mean  the  failure  of  the 
Conference.  Whatever  other  fruits  it  might  bring 
forth  would  be  jeopardised  by  the  failure  of  a  Shan- 
tung settlement.  It  would  be  highly  questionable  if 
the  United  States  Senate  would  ever  ratify  the  Four- 
Power  Treaty  or  the  Naval  Treaty  if  this  one  ques- 
tion which  was  more  likely  than  any  one  thing  else  to 
disturb  the  peace  of  the  Pacific  were  not  settled  to 
the  satisfaction  of  the  interested  parties.  For  the 
success  of  the  Conference  itself,  therefore,  Mr. 
Hughes  was  perhaps  as  much  interested  in  bringing 
about  a  readjustment  of  the  question  as  were  the 
Chinese  and  the  Japanese  delegates  themselves, 
(it  is  curious  to  say  that  the  terms  of  the  Shantung 
Agreement  reached  at  Washington  has  never  been 
analysed.  Is  China  satisfied?  Is  Japan  satisfied? 
Is  the  Conference  satisfied  ?  As  far  as  China  is  con- 
cerned, the  agreement  has  been  favourably  received 

peace  took  place  on  board  the  U.S.S.  Marblehead,  in  the  presence  of  diplo- 
matic representatives  of  Mexico  and  the  United  States,  who  acted  "simply 
in  a  friendly  advisory  capacity."  Then,  again,  at  "The  Central  American 
Peace  Conference"  of  1907,  held  in  Washington,  D.  C.,  to  bring  about 
peace  among  the  five  Central  American  Republics,  the  representatives  of 
the  United  States  and  Mexico  were  present  at  all  deliberations,  who  lent 
"their  good  and  impartial  offices  in  a  purely  friendly  way  toward  the 
realisation  of  the  objects  of  the  Conference."  And,  finally,  we  may  refer 
to  the  offer,  on  April  25,  1914,  by  the  A  B  C  States  (Argentine,  Brazil,  and 
Chile)  of  their  "good  offices  for  the  peaceful  and  friendly  settlement  of  the 
conflict  between  the  United  States  and  Mexico."  The  offer  was  accepted 
by  both  Mexico  and  the  United  States,  and  negotiations  were  commenced, 
May  20,  1914,  at  Niagara  Falls,  Ontario,  and  continued  under  the  direction 
of  the  diplomatic  representatives  of  the  ABC  States  accredited  at 
Washington. 


268  THE  SHANTUNG  QUESTION 

at  home,  although  this  expression  of  satisfaction  is 
not  without  a  dissenting  note. 

Let  us  analyse  the  agreement  from  the  Chinese 
point  of  view.  What,  if  any,  are  the  objections  to  it  ? 

The  first  objection  is  found  in  the  fact  that  the 
Kiaochow-Tsinan  Railway  and  its  branches  were 
not  restored  to  China,  but  sold  back  to  China,  at  the 
price  assessed  by  the  Interallied  Reparation  Com- 
mission, which  is  53,406,141  gold  marks,  plus  the  cost 
of  permanent  improvements  and  minus  the  allowance 
for  depreciation.  "  China  undertakes  to  reimburse 
to  Japan  the  actual  value  of  all  the  railway  prop- 
erties," and  the  reimbursement  will  be  effected  by 
delivering  to  Japan  "  simultaneously  with  the  comple- 
tion of  the  transfer  of  the  railway  properties,  Chinese 
Government  Treasury  Notes,  secured  on  the  prop- 
erties of  the  railway,  and  running  for  a  period  of 
fifteen  years,  but  redeemable,  whether  in  whole  or  in 
part,  at  the  option  of  China,  at  the  end  of  five  years 
from  the  date  of  the  delivery  of  the  said  Treasury 
Notes,  or  at  any  time  thereafter  upon  six  months' 
previous  notice."  In  other  words,  China  pays  the 
purchase  price  in  her  Treasury  Notes,  and  takes  five 
to  fifteen  years  to  redeem  them.  Five  years,  it  should 
be  remembered,  is  a  long  time,  before  the  lapse  of 
which  a  good  deal  of  water  shall  have  flowed  under  the 
Shantung  railway  bridge.  And  how  soon  China  can 
redeem  the  notes  after  the  option  period  is  a  dubious 
question.  It  may  be  five  years ;  it  may  be  ten  years ; 
and  if  she  continues  to  find  herself  in  a  political  and 
financial  quagmire  as  she  is  to-day,  it  is  not  unlikely 
that  she  will  ask  for  an  extension  of  the  period  of 
redemption.  Japan  will  thus  have  an  opportunity, 


THE  NEW  SETTLEMENT  269 

indeed,  a  legitimate  right,  to  remain  in  Shantung.  In 
fact,  she  will  make  the  best  of  the  five  years  of  the 
option  period  and  so  entrench  her  economic  and 
political  position  in  Shantung  that  when  the  day  of 
payment  or  redemption  arrives,  she  cannot  be  dis- 
lodged. 

In  answer  to  this,  it  may  be  said  that  the  five  years' 
option  period  will  work  no  serious  danger  to  China 
if  she  can  avail  herself  of  the  breathing  space  it 
affords  and  get  herself  financially  ready  before  the 
redemption  commences.  It  should  be  remembered 
that  this  plan  of  reimbursement  was  adopted  in  the 
place  of  that  of  cash  payment  by  a  single  deposit  in  a 
neutral  bank.  While  the  latter  scheme  was  much 
more  preferable,  it  was  not  acceptable  to  Japan  as  she 
desired  "to  retain  an  interest  in  the  railway,"  and 
was  not  pressed  by  China  because  she  had  no  assur- 
ance of  raising  the  necessary  amount  of  funds  to 
meet  the  obligation.  According  to  one  who  was  pres- 
ent at  the  discussion  of  the  plan  of  cash  deposit,  the 
Chinese  delegates  were  very  much  embarrassed  when 
asked  by  the  Japanese  as  to  the  ability  of  Peking 
Government  to  make  the  deposit  and  the  assurance 
to  pay  if  cash  payment  were  accepted.  The  Chinese 
delegates  had  in  their  possession  the  telegraphic 
assurance  from  the  various  chambers  of  commerce  in 
China  and  from  the  Chinese  Bankers'  Union  that 
sufficient  funds  could  be  raised  to  make  the  purchase. 
Was  the  assurance  to  be  taken  at  its  face  value? 
Would  the  Chinese  delegates  depend  on  it  to  press 
their  plan  of  cash  payment,  while  the  Government 
which  they  represented  at  the  Conference  remained 
ominously  silent?  Upon  their  shoulders  was  the 


270  THE  SHANTUNG  QUESTION 

responsibility  to  devise  a  satisfactory  solution,  and 
they  could  not  afford  to  press  any  scheme  -too  far,  the 
acceptance  of  which  would  create  an  obligation  that 
they  knew  in  the  heart  of  hearts  their  Government 
might  not  be  able  to  fulfil.  China  is  to-day  divided 
politically,  and  very  near  bankrupt  financially.  A 
nation  in  such  a  turmoil  must  not  incur  serious  obli- 
gation. If  she  is  not  confident  enough  to  raise  the 
money  now,  she  may  be  able  to  do  so  in  five  years  to 
come  when  the  country  becomes  united.  If  she  is  still 
unable  to  raise  it,  she  has  another  ten  years  to  get 
ready  and  in  which  to  meet  her  obligation.  If  she 
fails  again,  the  fault  will  lie  with  her,  and  not  with 
the  settlement  which  her  representatives  at  the  Wash- 
ington Conference  have  concluded.  Upon  China's 
ability  to  get  up  on  her  own  feet  again  in  the  next  few 
years  is  apparently  premised  the  Shantung  settle- 
ment. The  worse  would  come  to  the  worst,  indeed,  if 
her  present  chaos  and  resulting  weaknesses  should 
continue. 

/The  more  objectionable  feature  of  the  agreement 
is,  however,  to  be  found  in  the  stipulation  that,  pend- 
ing the  redemption  of  the  said  Treasury  Notes,  "the 
Government  of  the  Chinese  Republic  will  select  and 
appoint,  for  so  long  a  period  as  any  part  of  the  said 
Treasury  Notes  shall  remain  unredeemed,  a  Japanese 
subject  to  be  Traffic  Manager,  and  another  Japanese 
subject  to  be  Chief  Accountant  jointly  with  the 
Chinese  Chief  Accountant  and  with  co-ordinate  f unc- 
tions. "  It  has  been  pointed  out  that  these  two  posts 
thus  given  away  to  the  Japanese  subjects  are  so 
important  and  their  influence  in  the  administration 
of  the  railways  will  be  so  great  that  they  can  almost 


THE  NEW  SETTLEMENT  271 

control  it.  The  example  of  the  Chinese  Eastern  Bail- 
way  is  given  as  a  case  in  point.  The  Chinese  Pres- 
ident is  reduced  to  a  figure-head,  while  the  Russian 
vice-president  controls  the  administration  of  the  rail- 
way. There  is,  therefore,  good  ground  to  think  that, 
with  Japanese  appointed  as  the  Traffic  Manager  and 
Chief  Accountant  of  the  railway,  the  administration 
and  control  of  the  line  may  continue  to  be  in  Japanese 
hands.  The  restoration  will  be  in  name  only,  and  the 
good  Treasury  Notes  will  be  issued  for  nothing.  For 
at  least  five  years,  the  Japanese  Traffic  Manager  and 
the  Japanese  Chief  Accountant  will  be  on  their  job, 
and  they  will  remain  so  long  as  the  Treasury  Notes 
remain  unredeemed. 

The  objection  is  well  grounded,  and  for  reasons 
stated  it  is  almost  unanswerable.  A  word  or  two 
may,  however,  be  said,  not  to  justify  the  term,  but  to 
show  that  it  is  not  so  bad  as  it  may  seem  at  the  first 
sight.  Of  course,  the  appointment  of  Japanese  to 
be  the  Traffic  Manager  and  the  Chief  Accountant  of 
the  railway  depends  upon  the  redemption  of  the 
Treasury  Note.  Their  tenure  of  office  cannot  exceed 
the  five  years  if  the  notes  are  promptly  redeemed 
after  the  period  of  option.  If  prompt  redemption  is 
not  possible,  they  will  remain  as  long  as  the  notes 
shall  remain  unredeemed.  At  any  rate,  the  matter  is, 
after  five  years,  in  the  hands  of  the  Chinese  Govern- 
ment. To  the  possibility  of  usurping  the  control  of 
the  railway  by  the  Japanese  officers,  there  is,  in  the 
meantime,  this  check:  there  is  one  Chinese  Chief 
Accountant  to  co-operate  with  the  Japanese  and  a 
Chinese  Managing  Director  who  will  direct,  control, 
and  supervise  the  entire  staff  and  the  administration 


272  THE  SHANTUNG  QUESTION 

of  the  railway.  It  is,  of  course,  to  be  granted  that 
the  presence  of  a  Japanese  Traffic  Manager  and  a 
Japanese  Chief  Accountant  may  prove  inconvenient, 
and,  in  certain  cases  easily  imaginable,  embarrassing. 
They  may  have  their  own  axe  to  grind;  they  may 
be  inclined  to  work  in  the  interest  of  Japan,  as  most 
of  the  Japanese  employes  in  the  Chinese  Government 
do,  rather  than  in  the  interest  of  China ;  they  may  use 
their  official  position  to  promote,  sub  rosa,  the  com- 
mercial and  economic  interests  of  their  own  nationals 
in  Shantung ;  all  this  is  attributing  to  them  unworthy 
motives,  which  is  quite  justified  in  view  of  the 
general  conduct  of  the  Japanese  employes  in  the  past, 
but  which  may  not  be  true  in  this  particular  case.  It 
is  not  necessary  to  look  for  the  worst.  ^ 

On  the  other  hand,  there  is  mucliu)  be  said  for  the 
Shantung  Agreement  reached  at  Washington.  (The 
very  fact  that  the  question  was  brought  to  a  solution 
in  connection  with  the  Washington  Conference  was  a 
matter  for  congratulation.  China  had  thrice  refused 
to  negotiate  directly  with  Japan  about  the  restoration 
of  the  province ;  she  had  little  hope  of  presenting  the 
question  to  the  League  of  Nations  with  any  success ; 
she  had  no  other  ways  or  means  of  settling  the  ques- 
tion ;  compelled  to  fall  back  upon  direct  negotiation, 
she  would  have  great  difficulty  in  winning  her  points. 
Now,  as  collateral  to  the  Washington  Conference,  she 
debated  the  Shantung  question  with  Japan,  and  set- 
tled it  much  to  her  satisfaction.  China  was  satisfied 
that,  although  the  " conversations"  took  place  outside 
of  the  Conference,  the  settlement  was  made  a  part  of 
its  permanent  record.  Although  she  was  by  the 
agreement  required  to  pay  for  the  railway  and  its 


THE  NEW  SETTLEMENT  273 

appurtenant  properties,  the  wireless  station  and  the 
salt  industry,  she  got  back  everything  that  is  of  any 
value.  In  view  of  her  previous  commitments,  the 
terms  obtained  are  undoubtedly  better  than  what  she 
could  ever  hope  for,  notwithstanding  the  popular 
slogan,  the  unconditional  restoration  of  Shantung. 
It  may  perhaps  be  better  to  refer  to  specific  instances 
in  order  to  make  the  point  clear. 

It  may  be  recalled  that  in  the  Shantung  Treaty  of 
1915  entered  into  as  a  result  of  the  Twenty-one 
Demands  China  agreed  to  "  approach  Japanese  capi- 
talists to  negotiate  for  a  loan"  for  the  construction 
of  the  Chefoo-Weihsien  Railway.  The  new  agree- 
ment on  the  subject  gives  China  the  opportunity 
either  to  finance  it  with  Chinese  capital  or  to  turn  it 
over  to  the  International  Financial  Consortium.  By 
the  secret  understandings  of  September  28,  1918, 
reached  between  the  Japanese  Foreign  Minister  and 
the  Chinese  Minister  at  Tokio,  the  right  to  construct 
the  Tsinan-Shunteh  and  the  Kaomi-Hsuchow  lines 
was  given  to  Japan.  These  concessions  shall,  accord- 
ing to  the  new  agreement,  be  made  "open  to  the  com- 
mon activity  of  an  international  financial  group." 
(The  word  "group"  is  here  adopted,  it  may  be  noted, 
in  order  to  distinguish  it  from  the  International 
Financial  Consortium,  the  terms  of  which  are  not 
acceptable  to  China) .  And  by  the  same  secret  under- 
standings, "the  Kiaochow-Tsinan  Railway,  after  its 
ownership  is  definitely  determined,  is  to  be  made  a 
Chino- Japanese  joint  enterprise,"  and  Japanese 
troops  could  be  stationed  both  at  Tsingtao  and  Tsinan. 
The  new  settlement  includes  the  purchase  by  China 
of  the  Kiaochow-Tsinan  Railway  and  the  complete 


274  THE  SHANTUNG  QUESTION 

withdrawal  of  Japanese  troops  from  Shantung.  The 
Versailles  Treaty  of  Peace  handed  to  Japan  all  the 
mines,  cables,  public  buildings,  and  German  state 
properties  in  Shantung.  The  new  agreement  restores 
them  all  to  China,  although  restoration  is  in  certain 
cases  to  be  paid  for.  It  may  also  be  noted  that  Japan 
has  engaged  to  "  restore  to  China  the  former  German 
leased  territory  of  Kiaochow,"  to  renounce  all  rights 
of  preference  with  respect  to  foreign  assistance  in 
persons,  capital  and  material  in  Shantung,  to  hand 
the  Customs  Office  at  Tsingtao  to  exclusive  Chinese 
administration,  to  sell  back  to  China  the  salt  indus- 
try, and  to  forego  her  claims  for  an  exclusive 
Japanese  settlement  or  an  international  settlement 
at  Tsingtao.  These  provisions  represent,  one  and  all, 
Japan's  " concessions"  to  China,  if  concessions  they 
be,  which  the  Peking  Government  could  not  expect 
even  in  its  most  sanguine  moments.  To  prove  this  it 
is  but  necessary  to  refer  to  the  terms  of  a  Shantung 
settlement,  formulated  by  the  Peace  Treaty  Com- 
mission of  Peking  (an  organisation  attached  to  the 
Chinese  Foreign  Office),  which  is  given  at  the  end  of 
this  chapter. 

To  show  more  strikingly  what  the  Chinese  delega- 
tion at  the  Washington  Conference  has  accomplished 
with  respect  to  the  Shantung  settlement,  we  may  for 
purpose  of  comparison  refer  to  the  extent  to  which 
the  Chinese  delegation  at  the  Versailles  Peace  Con- 
ference was  prepared  to  go  with  regard  to  the  same 
matter.  On  April  23,  1919,  the  Chinese  delegation 
proposed  in  writing  to  the  Council  of  Four  what  was 
confidentially  known  as  a  " compromise  proposal" 
for  the  Shantung  dispute.  It  included  (1)  the  cession 


THE  NEW  SETTLEMENT  275 

by  Germany  of  all  her  rights  and  possessions  in  Shan- 
tung to  the  Five  Principal  Allied  and  Associated 
Powers  to  be  eventually  restored  to  China,  (2)  a 
definite  engagement  by  Japan  to  evacuate  Shantung 
within  twelve  months  after  the  conclusion  of  peace, 
(3)  reimbursement  by  China  of  all  the  military 
expenses  which  Japan  had  incurred,  and  (4)  designa- 
tion by  China  of  a  certain  area  in  Tsingtao  for  the 
purpose  of  an  international  settlement.  None  of 
these  conditions,  which  China  was  prepared  to  accept, 
were  embodied  in  the  new  agreement. 

It  is  thus  evident  that  the  Shantung  settlement 
reached  at  Washington  is  not  a  bad  bargain  for 
China.  Chinese  public  opinion  in  general  has  reason 
to  be  satisfied. 

NOTE 

It  may  be  of  interest  to  compare  the  terms  of  the 
Shantung  Agreement  reached  at  Washington  with 
the  "  tentative  formula  for  the  solution  of  the  Shan- 
tung question"  prepared  by  the  Peace  Treaty  Com- 
mission in  Peking,  late  in  October,  1921.  The  said 
formula  seemed  to  have  had  the  tacit  approval  of  the 
Peking  Government,  and  was  cabled  to  Dr.  V.  K. 
Wellington  Koo,  the  Chinese  representative  on  the 
League  of  Nations,  for  his  information  and  guid- 
ance, if  the  question  should  be  brought  before  the 
League.  The  following  is  a  translation  of  the 
" formula"  which  the  Chinese  Foreign  Office  gave 
to  the  press  on  November  1,  1921.  The  formula 
reads : 

"  Owing  to  the  impossibility  of  finding  a  way  to  settle  the 
Shantung  question  with  Japan,  the  solution  of  which  is  based  on 
the  ground  that  after  her  declaration  of  war  with  Germany 


276  THE  SHANTUNG  QUESTION 

Kiaochow  should  be  returned  by  Japan,  China  proposes  the 
following  formula  of  settlement: 

"1.  The  whole  of  Kiaochow  should  be  returned  to  China, 
who  will  voluntarily  open  Tsingtao  as  a  commercial  port  under 
regulations  similar  to  those  carried  out  by  the  German  regime. 
Goods  imported  for  sale  at  said  port  shall  be  exempted  from 
Customs  charges,  and  more  or  less  in  accordance  with  the  special 
area  system  at  Tientsin  and  Hankow,  a  Municipal  Administra- 
tion shall  be  instituted  therein. 

"2.  The  sales  of  land  by  Chinese  to  Japanese  through  the 
force  and  compulsion  of  the  Japanese  Military  Command  during 
the  period  of  military  occupation  shall  be  nullified. 

"3.  The  German  public  properties  in  Tsingtao,  such  as 
wharves,  pontoon  bridges,  warehouses,  lighthouses,  etc.,  shall 
be  handed  over  to  the  Chinese  Maritime  Customs  for  administra- 
tion, while  the  electric  light  plant,  the  slaughter-house,  the  water- 
works, the  mining  bureau,  and  the  hospitals,  etc.,  shall  be  handed 
over  to  the  municipal  administration  for  management,  and  the 
fortresses  and  military  barracks,  etc.,  shall  be  taken  over  by 
the  Chinese  Central  Government. 

"As  to  the  warehouses  which  the  Japanese  have  managed  for 
several  years,  arrangements  with  regard  to  the  manner  of 
clearing  up  their  accounts  may  be  separately  discussed. 

"Salt  has  always  been  an  article  of  monopoly  by  the  Chinese 
Government.  Formerly  the  Germans  in  Tsingtao  did  not  engage 
in  the  salt  industry.  It,  and  the  salt  fields  now  occupied  by 
Japan,  shall  be  returned  to  China.  (If  Japan  should  be  in  want 
of  salt  in  the  future,  the  Chinese  Government  may  by  a  special 
permit  allow  Japan  annually  to  buy  a  certain  amount  of  salt 
from  Tsingtao  for  a  certain  number  of  years.) 

"4.  With  reference  to  the  railway  problem  in  the  Shantung 
peninsula,  the  Tsinan-Shunteh,  and  Kaomi-Hsu  lines  may  be 
given  over  to  the  new  Consortium  to  be  undertaken  by  it,  and 
the  Kiaochow-Tsinan  railway  shall  be  solely  operated  by  China 
herself.  (Or,  the  date  of  its  return  to  China  having  been 
definitely  agreed  upon,  before  its  return  a  temporary  under- 
taking on  a  joint  capital  and  business  basis  may  be  permitted). 

"The  German  shares,  whether  belonging  to  the  German  Gov- 
ernment or  to  private  persons  shall  be  divided  equally  between 
China  and  Japan,  and  if  the  shares  of  private  persons  need  to 
be  indemnified,  China  will  be  responsible  for  the  whole  value 
of  same. 


THE  NEW  SETTLEMENT  277 

"In  order  to  be  fair  and  just,  the  yearly  surplus  of  profits 
which  accrued  to  the  railway  during  the  period  of  the  Japanese 
occupation  should  be  shared  by  China. 

"As  regards  that  part  of  the  railway  administration  which 
is  of  a  political  nature,  such  as  the  right  of  organising  railway 
police,  etc.,  it  shall  be  exercised  exclusively  by  China. 

"5.  All  the  Japanese  troops  in  Shantung  province  are  to  be 
withdrawn  within  the  shortest  period. 

"6.  Before  the  return  of  the  railway  to  China  the  mines 
along  the  railway  already  being  operated  may  be  made  a  Sino- 
Japanese  undertaking. 

"7.  The  cable  lines  between  Tsingtao  and  Chefoo,  and  between 
Tsingtao  and  Shanghai,  all  being  situated  within  Chinese  terri- 
torial waters,  shall  be  taken  over  by  China,  and  the  wireless 
stations  established  by  the  Japanese  in  Tsinan  shall  also  be 
taken  over,  the  cost  of  the  construction  of  which  shall  be  reim- 
bursed by  China. 

"8.  Japan  should  make  a  declaration  to  the  effect  that,  aside 
from  the  plan  of  settlement  agreed  upon  by  both  parties,  all 
the  rights  and  interests  formerly  acquired  by  Germany  in  Shan- 
tung based  on  either  treaties  or  agreements  are  thereby  re- 
nounced, and  no  further  claim  of  any  kind  shall  be  made 
regarding  them." 

An  unbiased  analysis  of  the  above  formula  will 
show  most  clearly  and  convincingly  how  the  terms  of 
the  Shantung  Agreement  concluded  in  connection 
with  the  Washington  Conference  are  much  better 
than  hoped  for. 


XX 

CONCLUSION 

WHAT  more  is  there  to  be  said  about  the 
Shantung  question  ?  It  has  been  amicably 
settled  to  the  mutual  satisfaction  of  Japan 
and  China  in  accordance  with  the  age-old  principle  of 
give-and-take,  and  the  settlement,  unless  the  future 
holds  the  unexpected  in  store,  promises  to  remove 
from  the  field  of  international  politics  this  highly 
serious  controversy  which  would  otherwise  remain  a 
source  of  infinite  trouble  and  an  obstacle  of  good  rela- 
tionship between  Japan  and  China  as  surely  as 
Alsace-Lorraine  was  an  international  sore  spot 
between  Germany  and  France  before  the  war.  When 
this  is  said  all  is  said. 

A  close  perusal  of  the  Shantung  Agreement  can- 
not, however,  fail  to  reveal  one  serious  and  perhaps 
dangerous  defect,  which  its  opponents  may  well  seize 
upon  as  a  point  for  attack.  It  is  that  the  Agreement 
has  many  loopholes  through  which  difficulties  may 
yet  break  out  in  the  future.  It  has  not  said  the  last 
word  about  the  Shantung  question. 

The  Agreement  creates  two  Joint  Commissions, 
which,  necessary  though  they  seem  to  be  in  the  execu- 
tion of  the  Agreement,  are  by  no  means  the  best 
arrangement  that  could  be  devised.  To  these  two 
Joint  Commissions  are  trusted  the  numerous  duties 
of  making  effective  the  restoration  of  Shantung :  the 

278 


CONCLUSION  279 

transfer  of  the  leased  territory  and  its  administra- 
tion; the  restoration  and  assessment  of  the  public 
properties,  the  railways,  and  their  appurtenances; 
the  formation  of  a  new  mining  company  to  operate 
the  mines  in  Shantung;  the  examination  of  the 
" vested  rights"  of  the  Japanese  subjects  and  com- 
panies in  the  province ;  the  transfer  of  salt  industry 
and  of  wireless  stations;  and  the  determination  of 
the  landing  of  the  Tsingtao-Sasebo  cable.  In  other 
words,  almost  all  the  details  incident  to  the  restora- 
tion of  Shantung  are  left  in  the  hands  of  these  two 
Joint  Commissions.  The  Chinese  members  and  the 
Japanese  members  on  either  of  these  two  Joint  Com- 
missions— each  country  is  to  appoint  three — may 
agree,  and  may  not  agree,  in  their  viewpoints  in  the 
execution  of  their  duties.  In  the  case  of  disagree- 
ment, is  it  to  be  expected  that  the  transfer  can  be 
completed  within  the  designated  periods  of  six  or 
nine  months'?  What  remedy  is  there  for  delay? 

Of  the  two,  the  Joint  Railway  Commission,  "with 
powers  to  appraise  the  actual  value  of  the  railway 
properties, "  is  more  important.  Its  duty  is  not  only 
to  attend  to  the  details  of  transfer,  but  also  to  decide 
upon  the  amount  of  reimbursement  upon  the  payment 
of  which  the  transfer  can  be  effected.  What,  if  the 
Commission  fails  to  agree?  This  situation  seems  to 
have  been  anticipated.  "Should  the  Joint  Railway 
Commission  fail  to  reach  an  agreement  on  any  matter 
within  its  competence,"  it  is  stipulated  in  Article  IV 
of  the  Annex  to  the  Shantung  Agreement,  "the  point 
or  points  at  issue  shall  be  taken  by  the  Government 
of  the  Chinese  Republic  and  the  Government  of 
Japan  for  discussion  and  adjustment  by  means  of 


280  THE  SHANTUNG  QUESTION 

diplomacy. ' '  It  may  well  be  anticipated  that,  once 
started,  there  will  be  no  end  to  this  kind  of  discussion, 
and  it  is  perfectly  easy  to  understand  what  "  diplo- 
macy" means  between  China  and  Japan.  The 
Shantung  question  and  all  that  it  involves  may  yet 
remain,  therefore,  subjects  for  international  hag- 
gling, to  take  place  at  Tokio,  but  more  likely  at 
Peking,  where  haggling  has  been  a  favourite  pastime 
for  diplomats  ever  since  its  imperial  gates  were 
thrown  open  to  them. 

In  conclusion,  therefore,  we  cannot  help  express- 
ing our  fervent  hope  that  the  restoration  of  Shan- 
tung will  encounter  no  serious  difficulty  and  can  be 
accomplished  within  the  specified  time.  Upon  the 
good  faith  of  the  parties  to  the  Shantung  Agreement 
depends  its  successful  execution  entirely. 


APPENDICES 


APPENDIX  A 

Convention  Between  China  and  Germany  Respecting  the  Lease 
of  Kiaochow  to  Germany,  March  6,  1898* 

The  incidents  connected  with  the  Mission  in  the  Prefecture  of 
Tsao-chow-fu,  in  Shantung,  being  now  closed,  the  Imperial 
Chinese  Government  considers  it  advisable  to  give  a  special  proof 
of  their  grateful  appreciation  of  the  assistance  rendered  to  them 
by  Germany.  The  Imperial  German  and  the  Imperial  Chinese 
Governments,  therefore,  inspired  by  the  equal  and  mutual  wish 
to  strengthen  the  bonds  of  friendship  which  unite  the  two 
countries,  and  to  develop  the  commercial  relations  between  the 
subjects  of  the  two  States,  have  concluded  the  following  sepa- 
rate Convention: 

SECTION  I 
Lease  of  Kiaochow 

ART.  1.  His  Majesty  the  Emperor  of  China,  guided  by  the 
intention  to  strengthen  the  friendly  relations  between  China 
and  Germany,  and  at  the  same  time  to  increase  the  military 
readiness  of  the  Chinese  Empire,  engages,  while  reserving  to  him- 
self all  rights  of  sovereignty  in  a  zone  of  50  kilom.  (100  Chinese 
li)  surrounding  the  Bay  of  Kiaochow  at  high  water,  to  permit 
the  free  passage  of  German  troops  within  this  zone  at  any  time, 
and  also  in  taking  any  measures,  or  issuing  any  ordinances 
therein,  to  previously  consult  and  secure  the  agreement  of  the 
German  Government,  and  especially  to  place  no  obstacle  in  the 
way  of  any  regulation  of  the  water-courses  which  may  prove 
to  be  necessary.  His  Majesty  the  Emperor  of  China,  at  the  same 

*  This  convention  and  the  three  following  (Appendix  B,  C,  and  D)  are 
translations  furnished  by  the  Chinese  delegation  to  the  Peace  Conference 
at  Versailles.  The  text  varies,  in  many  respects,  from  those  given  by 
Rockhill,  Mayer,  and  MacMurray. 

281 


282  APPENDICES 

time,  reserves  to  himself  the  right  to  station  troops  within  this 
zone,  in  agreement  with  the  German  Government,  and  to  take 
other  military  measures. 

ART.  2.  With  the  intention  of  meeting  the  legitimate  desire 
of  His  Majesty  the  German  Emperor,  that  Germany  like  other 
Powers  should  hold  a  place  on  the  Chinese  coast  for  the  repair 
and  equipment  of  her  ships,  for  the  storage  of  materials  and 
provisions  for  the  same,  and  for  other  arrangements  connected 
therewith,  His  Majesty  the  Emperor  of  China  leases  to  Germany, 
provisionally  for  ninety-nine  years,  both  sides  of  the  entrance 
to  the  Bay  of  Kiaochow.  Germany  engages  to  construct,  at  a 
suitable  moment,  on  the  territory  thus  leased,  fortifications  for 
the  protection  of  the  buildings  to  be  constructed  there  and  of 
the  entrance  to  the  harbour. 

ART.  3.  In  order  to  avoid  the  possibility  of  conflicts,  the 
Imperial  Chinese  Government  will  not  exercise  rights  of  admin- 
istration in  the  leased  territory  during  the  term  of  the  lease,  but 
grants  the  exercise  of  the  same  to  Germany,  within  the  following 
limits : 

1.  On  the  northern  side  of  the  entrance  to  the  Bay : 

The  Peninsula  bounded  to  the  northeast  by  a  line  drawn  from 
the  northeastern  corner  of  Potato  Island  to  Loshan  Harbour. 

2.  On  the  southern  side  of  the  entrance  to  the  Bay: 

The  Peninsula  bounded  to  the  southwest  by  a  line  drawn  from 
the  southwesternmost  point  of  the  Bay  lying  to  the  south-south- 
west of  Chiposan  Island  in  the  direction  of  Tolosan  Island. 

3.  The  Island  of  Chiposan  and  Potato  Island. 

4.  The  whole  water  area  of  the  Bay  up  to  the  highest  water- 
mark at  present  known. 

5.  All  islands  lying  seaward  from  Kiaochow  Bay,  which  may 
be  of  importance  for  its  defence,   such  as   Tolosan,   Chalien- 
chow,  etc. 

The  High  Contracting  Parties  reserve  to  themselves  to  delimit 
more  accurately,  in  accordance  with  local  traditions,  the  boun- 
daries of  the  territory  leased  to  Germany  and  of  the  50  kilom. 
zone  round  the  Bay,  by  means  of  Commissioners  to  be  appointed 
on  both  sides. 

Chinese  ships  of  war  and  merchant  vessels  shall  enjoy  the  same 
privileges  in  the  Bay  of  Kiaochow  as  the  ships  of  other  nations 
on  friendly  terms  with  Germany;  and  the  entrance,  departure 
and  sojourn  of  Chinese  ships  in  the  Bay  shall  not  be  subject  to 
any  restrictions  other  than  those  which  the  Imperial  German 


APPENDICES  283 

Government,  in  virtue  of  the  rights  of  administration  over  the 
whole  of  the  water  area  of  the  Bay  transferred  to  Germany,  may 
at  any  time  find  it  necessary  to  impose  with  regard  to  the 
ships  of  other  nations. 

ART.  4.  Germany  engages  to  construct  the  necessary  naviga- 
tion signs  on  the  islands  and  shallows  at  the  entrance  of  the 
Bay. 

No  dues  shall  be  demanded  from  Chinese  ships  of  war  and 
merchant  vessels  in  the  Bay  of  Kiaochow,  except  those  which 
may  be  levied  upon  other  vessels  for  the  purpose*  of  maintain- 
ing the  necessary  harbour  arrangements  and  quays. 

ART.  5.  Should  Germany  at  some  future  time  express  the 
wish  to  return  Kiaochow  Bay  to  China  before  the  expiration  of 
the  lease,  China  engages  to  refund  to  Germany  the  expenditure 
she  has  incurred  at  Kiaochow  and  convey  to  Germany  a  more 
suitable  place. 

Germany  engages  at  no  time  to  sublet  the  territory  leased 
from  China  to  another  Power. 

The  Chinese  population  dwelling  in  the  leased  territory  shall 
at  all  times  enjoy  the  protection  of  the  German  Government 
provided  that  they  behave  in  conformity  with  law  and  order; 
unless  their  land  is  required  for  other  purposes,  they  may 
remain  there. 

If  land  belonging  to  Chinese  owners  is  required  for  any  other 
purpose,  the  owner  will  receive  compensation. 

As  regards  the  re-establishment  of  Chinese  customs  stations 
which  formerly  existed  outside  the  leased  territory  but  within 
the  50  kilom.  zone,  the  Imperial  German  Government  intends 
to  come  to  an  agreement  with  the  Chinese  Government  for  the 
definite  regulations  of  the  customs  frontier,  and  the  mode  of 
collecting  customs  duties  in  a  manner  which  will  safeguard  all 
the  interests  of  China,  and  propose  to  enter  into  further  negotia- 
tions on  the  subject. 

SECTION  II 
Railways  and  Mines 

ART.  1.  The  Chinese  Government  sanctions  the  construction 
by  Germany  of  two  lines  of  railways  in  Shantung.  The  first 
will  run  from  Kiaochow  to  Chinan  and  the  Boundary  of  Shan- 
tung Province  via  Weihsien,  Tsingchow,  Poshan,  Tzechwan  and 
Tsowping.  The  second  line  will  connect  Kiaochow  with  I-chow, 


284  APPENDICES 

whence  an  extension  will  be  constructed  to  Chinan  through 
Laiwu-Hsien.  The  construction  of  the  line  from  Chinan  to 
the  boundary  of  Shantung  Province  shall  not  be  begun  till 
after  the  completion  of  the  construction  of  the  line  to  Chinan, 
so  that  a  further  arrangement  may  be  made  with  a  view  to 
effecting  a  connection  with  China's  own  railway  system.  What 
places  the  line  from  Chinan  to  the  provincial  boundary  shall 
take  in  en  route  shall  be  specified  in  the  regulations  to  be  made 
separately. 

ART.  2.  In  order  to  carry  out  the  above-mentioned  railway 
work  a  Chino-German  Railway  Company  shall  be  formed  with 
branches  in  one  or  more  places,  and  in  this  Company  both  Ger- 
man and  Chinese  merchants  shall  be  at  liberty  to  raise  the 
capital  and  appoint  directors  for  the  management  of  the  under- 
taking. 

ART.  3.  All  arrangements  for  the  above  purposes  shall  be 
determined  in  an  additional  agreement  to  be  concluded  by  the 
High  Contracting  Parties  as  soon  as  possible.  China  and  Ger- 
many will  settle  this  matter  by  themselves,  but  the  Chinese 
Government  will  accord  favourable  treatment  to  the  said  Chino- 
German  Railway  Company  in  constructing  and  operating  the 
above-mentioned  lines  and  extend  to  them  other  privileges 
enjoyed  by  Chino-Foreign  Companies  established  in  other  parts 
of  China. 

The  above  article  is  conceived  only  in  the  interest  of  com- 
merce: it  has  no  other  design.  Positively  no  land  or  territory 
in  the  Province  of  Shantung  may  be  annexed  in  the  construction 
of  the  above-mentioned  railways. 

ART.  4.  In  the  vicinity  of  the  railways  to  be  built,  within 
30  li  of  them,  as,  for  instance,  in  Weihsien  and  Poshan,  Hsien 
on  the  Northern  line  from  Kiaochow  to  Chinan  and  as  in  I-chow 
Fu  and  Laiwu  Hsien  on  the  Southern  line  from  Kiaochow  via 
I-chow  to  Chinan,  German  merchants  are  permitted  to  excavate 
coal,  etc.  The  necessary  works  may  be  undertaken  by  Chinese 
and  German  merchants  combining  the  capital.  The  mining 
regulations  shall  also  be  subsequently  negotiated  with  care. 
The  Chinese  Government  will,  according  to  what  has  been 
stipulated  for  in  the  provision  concerning  the  construction  of 
railways,  also  accord  favourable  treatment  to  the  German 
merchants  and  workmen,  and  extend  to  them  other  privileges 
enjoyed  by  Chino-Foreign  Companies  established  in  other  parts 
of  China. 


APPENDICES  285 

This  article  is  also  conceived  only  in  the  interests  of  com- 
merce, and  has  no  other  design. 


SECTION  III 
Affairs  in  the  Whole  Province  of  Shantung 

If  within  the  Province  of  Shantung  any  matters  are  under- 
taken for  which  foreign  assistance,  whether  in  personnel,  or  in 
capital,  or  in  material,  is  invited,  China  agrees  that  the  German 
merchants  concerned  shall  first  be  asked  whether  they  wish  to 
undertake  the  works  and  provide  the  materials. 

In  case  the  German  merchants  do  not  wish  to  undertake  the 
said  works  and  provide  the  materials,  then  as  a  matter  of  fair- 
ness China  will  be  free  to  make  such  other  arrangements  as 
suits  her  convenience. 

Ratifications 

The  above  agreement  shall  be  ratified  by  the  Sovereigns  of 
both  Contracting  States,  and  the  ratifications  exchanged  in  such 
manner  that,  after  the  receipt  in  Berlin  of  the  Treaty  ratified 
by  China,  the  copy  ratified  by  Germany  shall  be  handed  to  the 
Chinese  Minister  in  Berlin. 

The  foregoing  Treaty  has  been  drawn  up  in  four  copies, 
two  in  German  and  two  in  Chinese,  and  was  signed  by  the 
Representatives  of  the  two  Contracting  Parties  on  the  6th 
March,  1898,  equal  to  the  14th  day  of  the  2nd  month  in  the 
24th  year  Kuang-Hsu. 

(In  Chinese)     Li  HUNG  CHANG, 

[Great  Seal  of  the  Imperial  Chinese  Grand  Secretary, 

Tsung-li  Yamen.]  Minister  of  the  Tsung-li  Yamen,  etc. 

BARON  VON  HEYKING, 
Imperial  German  Minister. 

(In  Chinese)     WENG  TUNG  Ho, 

Grand  Secretary,  Member  of  the 
Council  of  State,  Minister  of  the 
Tsung-li  Yamen,  etc. 


286  APPENDICES 


APPENDIX  B 

Agreement  Between  China  and  Germany  Respecting  the 

Kiaochow-Chinan  Railway  Regulations, 

March  21,  1900 

His  Excellency  the  Governor  of  the  Province  of  Shantung 
Yuan  Shih  Kai  and  His  Excellency  the  Lieutenant  General  Yin 
Chang,  upon  petition  of  the  Governor  of  Shantung,  especially 
delegated  by  Imperial  decree  to  these  negotiations,  on  the  one 
side,  and  the  Managing  Board  of  the  Shantung  Railway  Com- 
pany at  Tsingtao,  represented  by  Mr.  H.  Hildebrand,  a  Royal 
Inspector  of  Prussian  Railways,  on  the  other  side,  have,  in  order 
to  prevent  agitation  and  disturbances  of  any  kind  in  Shantung 
during  the  period  of  building  the  railway  and  to  maintain 
friendly  relations  between  the  population  of  the  province  and 
the  Company,  agreed  upon  the  following  Railway  Regulations 
with  regard  to  the  line  of  railway  between  the  boundaries  of  the 
German  leased  territory  and  Chinanfu,  subject  to  the  approval 
of  the  Board  of  Directors  of  the  Shantung  Railway  Company  in 
Berlin  and  reduced  to  writing  in  Chinese  and  German  texts 
of  like  tenour. 

ART.  1.  In  accordance  with  Art.  4,  section  2,  of  the  aforesaid 
Kiaochow  Convention  a  German-Chinese  Railway  Company  shall 
be  formed,  issuing  shares  to  German  and  Chinese  subjects.  This 
Company  shall  for  the  present  be  under  German  management. 
It  shall  half-yearly  notify  the  Chiao  Se  Chuo  at  Chinanfu  of  the 
number  of  shares  purchased  by  Chinese.  As  soon  as  the  amount 
of  such  shares  has  reached  Taels  100,000,  the  Governor  of  the 
Province  of  Shantung  shall  delegate  a  Chinese  official  for 
co-operation  at  the  seat  of  the  Company. 

ART.  2.  Should  in  future  branches  of  the  Administration 
of  the  Company  be  established  in  Shantung,  one  Chinese  official 
shall  be  delegated  to  each  one  of  them. 

ART.  3.  Officials  or  respectable  citizens  shall  be  consulted 
upon  the  location  of  the  railway,  in  order  to  take  as  far  as  pos- 
sible into  consideration  the  interests  of  the  population.  To 
avoid  difficulties  in  negotiations,  these  shall  be  conducted  on  the 
Chinese  side  by  Chinese  officials  delegated  by  the  Governor  of 
Shantung.  The  technical  determinations  of  the  location  of  line 
shall  be  left  to  the  Company's  engineers.  A  sketch  plan  of  the 


APPENDICES  287 

line 's  location,  done  in  a  scale  of  1 :  25,000  shall  be  submitted 
to  the  Governor  of  Shantung  for  information  and  only  there- 
after land  may  be  purchased.  The  construction  of  the  railway 
cannot  be  begun  before  the  land  has  actually  been  purchased. 

The  purchase  of  land  shall  be  done  peacefully  and  quickly 
as  hitherto,  so  that  the  construction  of  the  railway  be  not 
delayed  by  purchasing  land  or  by  difficulties  arising  from  dis- 
putes with  individual  owners.  To  avoid  all  such  difficulties  the 
above-mentioned  Chinese  official  shall  act  as  mediator  when  land 
is  purchased  and  shall  settle  all  disputes  eventually  arising. 
The  land  shall  be  purchased  in  an  honest  way  according  to  the 
locally  customary  ruling  price. 

The  Company  shall  not  be  allowed  to  buy  more  land  than 
necessary  for  the  railway  enterprise,  and  future  extension 
thereof. 

Meanwhile  the  following  minima  may  be  purchased : 

For  stopping  points  a  plot  of  land  630  m.  long  and  70  m. 
wide. 

For  country  stations  a  plot  of  land  730  m.  long  and  100  m. 
wide. 

For  small  town  stations  a  plot  of  land  850  m.  long  and  130 
m.  wide. 

For  stations  of  larger  towns  the  plots  of  land  have  to  be  larger, 
corresponding  to  actual  importance  of  the  place  in  question. 
The  land  necessary  for  the  supply  of  earth  to  construct 
embankments  is  not  included  in  the  foregoing  areas.  I  m.  is 
equal  to  2  feet  9.6  inches ;  1  foot  is  equal  to  0.338  m. 

ART.  4.  Wherever  water  courses  are  met,  sufficient  flow  has 
to  be  provided  for  by  building  bridges  and  culverts  so  that 
agriculture  may  suffer  no  damage. 

ART.  5.  The  road  is  to  be  located  in  such  a  way  as  not  to 
damage  or  cut  through  city  walls,  fortifications,  public  edifices 
and  important  places. 

ART.  6.  Houses,  farmsteads  and  villages,  temples,  graves  and 
above  all  high-class  graveyards  belonging  to  the  gentry  which  are 
fenced  in  and  planted  with  trees  shall  be  avoided  by  the  railway 
as  far  as  possible.  So  far  as  this  is  impossible  the  local  authori- 
ties shall  give  notice  to  the  owners  two  months  beforehand  and 
settle  with  them  a  compensation  of  an  amount  enabling  them  to 
erect  graveyards,  etc.,  of  the  same  condition  at  another  place 
without  sustaining  any  loss  of  money. 

ART.  7.     In  surveying  the  land  to  be  purchased  the  "kung" 


288  APPENDICES 

shall  be  used  as  unit.  One  kung  is  equal  to  five  official  feet,  one 
foot  is  equal  to  0.338  m.  One  Mu  is  counted  to  be  360  kung 
or  equal  to  9,000  square  feet. 

As  to  the  land  tax  to  be  paid  by  the  Shantung  Railway  Com- 
pany the  same  regulations  shall  be  applied  as  in  force  for  the 
most  favoured  Railway  Company  in  any  other  place  of  China. 

ART.  8.  Injuries  done  to  crops  during  preparatory  or  con- 
struction work  are  to  be  made  good  by  the  Company  according 
to  prices  to  be  settled  with  the  local  authorities. 

ART.  9.  The  salaries  of  the  assistants  placed  by  the  local 
authorities  at  the  disposition  of  the  Railway  at  its  wish  shall  be 
paid  by  the  latter.  These  salaries  shall  not  be  included  in  the 
price  of  land  purchased. 

The  money  for  the  land  is  to  be  paid  into  the  hands  of  the 
District-Magistrate,  who  is  responsible  for  the  proper  payment 
to  the  different  owners  entitled  to  receive  the  money. 

The  District-Magistrate  also  has  to  hand  over  the  title  deeds 
to  the  Railway  Company. 

ART.  10.  The  Railway  Administration  intending  to  rent 
houses  for  offices  and  residence  near  the  work  places  shall  apply 
to  the  District-Magistrate  who  will  make  the  necessary  arrange- 
ments with  the  owners  and  will  on  its  behalf  conclude  the 
contracts. 

ART.  11.  The  purchase  of  material  necessary  for  the  con- 
struction of  the  railway  shall  be  transacted  in  a  fair  manner 
and  the  usual  market-price  shall  be  paid  for  same.  If  necessary 
the  intervention  of  the  District-Magistrate  shall  be  applied  for. 
ART.  12.  The  exchange  of  different  kinds  of  money  shall 
always  be  done  at  the  rate  ruling  on  the  day. 

ART.  13.  The  Railway  Company  is  not  permitted  to  construct 
without  special  permission  of  the  Governor  of  Shantung  other 
railroads  than  those  mentioned  in  the  Kiaochow  Convention, 
including  the  branch  line  to  Poshanhsien. 

Branch  lines  connecting  coal  and  other  mines  and  places 
where  building  or  ballasting  materials  are  to  be  taken,  connecting 
with  the  main  line,  may  be  built  without  special  authorisation. 
It  is,  however,  understood  that  previous  notice  of  the  construc- 
tion of  such  lines  has  to  be  given  to  the  Governor  of  Shantung. 

ART.  14.  Foreigners,  traveling  or  doing  business  in  the 
interior  of  the  Province  of  Shantung,  in  order  to  enjoy  better 
protection,  must  be  provided  with  passports  duly  sealed  by  the 
proper  Chinese  and  German  authorities.  Chinese  local  authori- 


APPENDICES  289 

ties  can  not  assume  responsibility  if  such  a  passport  is  not 
produced. 

ART.  15.  German  and  Chinese  employees  of  the  Railway 
Company  are  to  be  provided  with  certificates  attested  by  the 
seals  of  the  Railway  Administration  and  of  the  local  Authorities, 
in  order,  when  necessary,  to  prove  their  official  capacity. 

The  engineers,  when  surveying,  shall  be  accompanied  by  an 
official,  delegated  by  the  District-Magistrate.  This  official  shall, 
if  necessary  by  police-force,  render  assistance  in  protecting  the 
property  of  the  Railway  Company  and  the  survey  poles. 

Persons  fraudulently  pretending  to  be  employees  of  the  Rail- 
way Company  shall  be  arrested  and  punished  by  the  Local 
Authorities. 

ART.  16.  If  troops  are  needed,  outside  of  the  100  li  (50  kilo- 
meter) zone,  they  shall  be  despatched  by  the  Governor  of  the 
Province  of  Shantung.  No  foreign  troops  may  be  employed  for 
this  purpose. 

The  Governor  of  the  Province  of  Shantung  binds  himself 
to  take  effective  measures  during  the  period  of  surveying  as 
well  as  when  the  railway  is  under  construction  or  opened  for 
traffic  to  prevent  any  damage  being  done  to  it  by  the  mob  or 
by  rebels. 

ART.  17.  This  railway,  having  for  sole  purpose  the  develop- 
ment of  commerce,  shall  not,  outside  of  the  100  li  zone,  be  per- 
mitted to  transport  foreign  troops  and  war  materials  employed 
by  them.  In  case  there  should  be  war  between  China  and  a 
foreign  power  and  the  railways  should  at  the  time  still  be 
managed  by  the  said  Company,  then  the  Company  must  con- 
tinue to  observe  the  provision  afore-mentioned.  In  case  certain 
sections  are  occupied  by  the  enemy  and  the  Company  should 
lose  its  power  of  management,  then  the  provincial  authorities 
will  not  be  responsible  for  the  protection  (of  the  railway). 

ART.  18.  Freightage  for  foodstuffs  and  clothing  to  be  dis- 
tributed amongst  the  distressed  during  famines  and  floods, 
shall  be  reduced  according  to  the  rules  adopted  by  the  railways 
of  Germany  and  when  troops  are  despatched  to  suppress 
rebellion  the  same  is  to  be  applied  to  the  fares  for  soldiers  and 
to  the  freightage  for  their  war  materials. 

ART.  19.  At  railway  stations,  where  custom-houses  are  estab- 
lished, the  Railway  Administration  shall  make  such  arrange- 
ments as  to  assist  the  Imperial  Chinese  Customs  in  collecting  the 
legal  dues. 


290  APPENDICES 

The  expenses  for  the  necessary  buildings,  to  be  erected  upon 
application  of  the  Customs  Administration  are  to  be  refunded 
by  the  latter  to  the  Railway  Administration  according  to  agree- 
ments always  to  be  made  beforehand. 

ART.  20.  The  natives  of  towns  and  villages  near  the  railway 
shall  be  as  far  as  possible  engaged  as  workmen  and  as  contractors 
for  the  supply  of  materials. 

ART.  21.  Chinese  subjects  employed  outside  the  leased  terri- 
tory by  the  Railway  Company  in  case  of  contravention  of  Chinese 
law  are  subject  to  the  jurisdiction  of  the  competent  District- 
Magistrate. 

The  competent  District-Magistrate  having  officially  notified 
the  necessity  of  legal  steps  against  such  employees,  the  Railway 
Company  shall  not  do  anything  by  which  he  may  evade  justice. 

Complaints  against  foreigners  are  to  be  dealt  with  according 
to  the  proper  laws.  In  such  cases,  the  Railway  Company  on  its 
part  shall  make  an  investigation  and  take  disciplinary  proceed- 
ings against  the  offender. 

ART.  22.  The  natives  of  districts,  where  the  railway  passes 
through,  shall  as  far  as  possible  be  employed  at  the  work  and 
shall  be  paid  for  as  customary  there. 

If  fights  should  occur  between  railway-men  and  natives  the 
local  official  will  have  the  right  to  arrest  and  punish  the  guilty. 

The  workmen  of  the  railway  are  absolutely  prohibited  unwar- 
rantably to  enter  houses  of  natives.  In  case  of  contravention 
they  will  be  severely  punished. 

ART.  23.  The  construction  of  the  railway  being  completed, 
foremen  and  workmen  necessary  for  maintenance  and  safekeep- 
ing of  the  line  are  as  far  as  practicable  to  be  engaged  from 
amongst  the  inhabitants  of  villages  and  towns  near  the  line 
in  conformity  with  suggestions  made  by  the  elders  of  these 
places.  These  elders  will  be  responsible  for  the  good  behaviour 
of  these  engaged  and  will  furnish  them  with  certificates  issued 
by  the  District-Magistrate. 

ART.  24.  The  railway  being  open  to  public  traffic,  its  admin- 
istration assumes  the  responsibility  for  any  loss  of  life  or  goods 
caused  by  accidents  and  is  liable  to  pay  compensation  to 
wounded  or  killed  persons  according  to  the  local  custom,  and 
to  cover  any  loss  of  goods  according  to  detailed  regulations  to 
be  drawn  up  and  published  by  the  Company. 

Likewise  the  Railway  will  be  held  responsible  for  damage  to 
persons  and  property  by  construction  trains  through  its  neglect. 


APPENDICES  291 

ART.  25.  The  safety  on  the  line  being  endangered  by  floods, 
slips  of  embankments  or  breakages  of  bridges,  etc.,  public  traffic 
shall  not  be  reopened  before  all  these  difficulties  have  been 
removed. 

ART.  26.  Should  the  Railway  Company  apply  for  soldiers 
to  protect  the  preparatory  work,  the  construction  or  the  traffic 
of  the  railway,  the  Governor  of  the  Province  of  Shantung  shall 
at  once  consider  the  circumstances  and  comply  with  such  applica- 
tion. The  amount  to  be  contributed  by  the  Company  for  the 
troops  despatched  shall  be  the  subject  of  a  further  under- 
standing. 

ART.  27.  In  the  German  leased  territory  the  rights  of  sov- 
ereignty are  safeguarded  by  the  Governor  of  Tsingtao.  In  the 
districts  of  the  remaining  part  of  the  Province  of  Shantung 
through  which  the  railway  is  running,  the  rights  of  sovereignty 
are  safeguarded  by  the  Governor  of  the  Province  of  Shantung. 

ART.  28.  It  shall  be  the  subject  of  further  agreements  when 
and  under  what  conditions  the  Chinese  Government  may  in 
future  take  over  the  railway. 

The  foregoing  regulations  after  being  approved  shall  be 
notified  to  the  Authorities  of  the  Shantung  Province  and  to  the 
officials  of  the  railway.  Thereupon  they  shall  be  duly  observed. 

Should  it  in  future  be  deemed  necessary  to  have  alterations 
made  of  some  of  the  above  regulations  or  to  have  drawn  up 
supplementary  rules,  this  can  only  be  done  by  mutual  agree- 
ment between  the  then  Governor  of  the  Province  of  Shantung 
and  the  Shantung  Railway  Company. 

This  agreement  is  executed  in  two  exemplars  each  of  which 
contains  a  Chinese  as  well  as  a  German  version  of  like  tenour. 
Each  of  the  contracting  parties  has  received  one  exemplar. 

Chinanful,  the  21st  of  March,  1900. 

(Seal  and  signature  of)     GOVERNOR  YUAN  SHIH  KAI, 

The  Governor  of  the  Province  of  Shantung. 

(Signed)     YIN  CHANG, 
H.IM.'s  Special  Delegate,  Lieut. -Gen. 

(Signed)     H.  HILDEBRAND, 
Die  Betriebsdirection  der  Schantung- 
Eisenbahn-Gesellschaft. 


292  APPENDICES 


APPENDIX  C 

Convention  Between  China  and  Germany  Respecting  the 

Withdrawal  of  German  Troops  from  Kiaochow  and 

Kaomi,  November  28th,  1905 

(TRANSLATION) 

The  Emperor  of  China  has  appointed  Yang  Shih-hsiang,  Civil 
and  Military  Governor  of  Shantung,  and  the  German  Emperor, 
Van  Semmern,  Civil  and  Military  Governor  of  Kiaochow,  who 
after  communicating  full  powers  and  finding  them  in  due  form 
have  agreed  upon  the  following  articles: 

Whereas,  The  German  Emperor  has,  for  the  purpose  of  pro- 
moting friendly  relations,  agreed  to  withdraw  the  troops 
stationed  at  Kiaochow  and  Kaomi,  the  following  articles  are 
hereby  concluded. 

ART.  1.  The  German  troops  at  Kiaochow  shall  withdraw 
immediately  after  this  Convention  has  been  signed. 

ART.  2.  One-fourth  of  the  German  troops  stationed  at 
Kaomi  shall  withdraw  immediately  after  the  signing  of  this 
Convention,  and  another  fourth,  within  two  months  therefrom. 
The  remaining  troops  shall  withdraw  within  the  next  two 
months,  during  which  period  barracks  and  stables  shall  be 
so  speedily  built  at  Tsingtao  that  the  said  troops  may  with- 
draw altogether  within  this  said  time-limit.  But  in  case  the 
said  works  can  not  be  finished  within  the  two  months,  a  com- 
plete withdrawal  shall  nevertheless  be  effected — there  shall  be 
no  further  extension  of  time. 

ART.  3.  From  the  date  of  the  signing  of  this  Convention, 
no  matter  whether  the  German  troops  at  Kiaochow  and  Kaomi 
have  completely  withdrawn  or  not,  the  railways  within  the  sur- 
rounding zone  shall  completely  be  under  the  supervision  and 
protection  of  the  Chinese  local  authorities  and  police  officers. 
The  police  officers  shall  despatch  so  many  policemen  as  they 
deem  fit  but  not  more  than  two  hundred  and  forty,  to  be  evenly 
stationed  at  various  sections;  all  matters  relating  thereto  shall 
be  conducted  according  to  the  police  regulations  prevailing 
beyond  the  surrounding  zone.  At  some  place  near  the  city  of 
Kaomi  there  shall  be  established  a  police  office  with  a  police 
force  of  not  more  than  one  hundred  men  who  shall,  by  turn, 
attend  to  their  duty  in  the  protection  of  the  railway  and  in 


APPENDICES  293 

the  supression  of  disturbances  which  may  arise.  But  if  China 
should  station  troops  in  the  said  place,  all  matters  relating 
thereto  shall  be  governed  by  the  Kiaochow  Lease  Convention. 

ART.  4.  All  the  works  which  Germany  has  constructed  in 
Kiaochow  and  Kaomi  such  as  barracks,  stables,  drill  grounds, 
roads,  waterworks,  and  the  like,  together  with  the  foundations 
thereof,  houses  and  the  fixtures  attached  thereto  cost,  calculated 
at  their  original  prices,  $496,388.48.  From  this  amount  are  to 
be  subtracted  $5,000.00  as  rent  paid  for  the  German  Govern- 
ment by  the  Chinese  Government,  $21,388.48  expended  for 
annual  repairs,  and  considered  as  representing  the  annual 
diminution  of  the  value  of  the  properties,  and  $70,000.00  as 
extra  reduction ;  the  net  price  will  then  be  $400,000.00  at  which 
the  said  properties  will  be  purchased  by  and  reverted  to  China, 
under  a  separate  agreement.  The  price  of  the  buildings  shall 
be  paid  off  in  four  installments  within  two  years  from  the  day 
when  the  barracks  at  Kiaochow  and  Kaomi  are  handed  over. 
After  their  purchase  or  reversion,  all  the  buildings  shall  be 
reserved  for  educational  and  other  public  uses. 

ART.  5.  In  case  Germany  should,  in  accordance  with  the 
Treaties,  require  passage  for  her  troops  through  Kiaochow  and 
Kaomi,  and  stay  there  for  a  few  days,  a  few  weeks'  notice  will 
be  necessary,  in  order  that  a  vacant  place  may  be  assigned  for 
their  temporary  stay  free  of  charge. 

Of  this  Convention  there  shall  be  made  four  copies  in  Chinese 
and  four  in  German,  identical  in  sense;  and  after  they  have 
been  signed,  two  copies  each  of  the  Chinese  and  German  texts 
shall  be  filed  at  the  office  of  the  Governor  of  Shantung,  and 
the  other  two  copies  each  of  the  said  two  languages,  at  the  office 
of  the  Civil  and  Military  Governor  of  Kiaochow,  for  reference, 
transmission,  and  observance. 

The  second  Day,  eleventh  Moon  of  the  Reign  of  Kwangshu, 
corresponding  to  the  28th  of  November,  1905. 

(Signed)     YANG  SHIH-HSIANO. 
YAN  SEMMERN, 


294  APPENDICES 


APPENDIX  D 

Agreement  Between   the   Provincial  Authorities   of   Shantung 

and  the   Chino-German  Mining   Company  for  Delimiting 

Mining  Areas  in  the  Province  of  Shantung,  July  24, 1911 

For  the  purpose  of  defining  the  mining  rights  of  the  Chino- 
German  Company  along  the  railways  in  Shantung  Province  and 
concluding  a  working  arrangement  the  Provincial  Authorities 
of  Shantung  and  the  Mining  Company  have  mutually  agreed 
upon  the  following  Articles: 

ART.  1.  1.  The  Shantung  Mining  Company  reserves  for  its 
exclusive  exploitation  the  Fangtze  and  Tzechwan  mining  areas 
and  the  mining  district  from  Chinlingchen  along  the  Kiaochow- 
Chinan  Railway  ih  a  northerly  direction  for  a  distance  of  30 
li  to  Changtien. 

2.  The  Company  is  to  prepare  maps  showing  the  boundaries 
of  the  mining  areas  it  designates  for  exclusive  development. 
These  maps  are  to  form  an  important  part  of  this  Agreement. 
All   mining   properties   within   the   specified    areas   are   to   be 
exclusively  exploited  by  the  Company  and  no  Chinese  under- 
takings are  permitted  therein. 

3.  With  the  exception  of  the  delimited  areas  set  aside  herein 
for  exclusive  development  by  the  Mining  Company  all  mining 
rights  hitherto  granted  by  China  to  the  Company  within  30  li 
(15  kilometers)  on  both  sides  of  Kiaochow-Chinan  Railroad  now 
in  operation,  the  Tientsin-Pukow  Railroad  now  under  construc- 
tion, and  the  Kiaochow-Ichow  Railroad  recently  surveyed  are 
hereby  cancelled. 

4.  Tzechwan  Hsien  and  Poshan  Hsien  being  within  the  30-li 
zone   of   mining   rights,    the    Company   originally    intended  to 
exploit  it  by  itself.     Now  as  an  act  of  special  friendship,  the 
Company  hereby  relinquishes  its  claim  to  Poshan  mines.     The 
Tzechwan  mining  area  beginning  on  the  south  at  Ta  Kwei  Shan 
passing  Lungkow  Chen  in  a  northwesterly  direction  and  reaching 
the  eastern  boundary  of  Tzechwan,   is  hereby  likewise  relin- 
quished to  the  Chinese  for  their  free  exploitation.    The  remain- 
ing areas  in  this  region  shall,  in  accordance  with  Article  1, 
belong  to  the  mining  areas  of  the  Company. 

5.  The  30-li  zone  of  the  Fangtze  mining  area  in  Weihsien 
touches  the  boundaries  of  Changlo  and  Ankiu  Hsien  and  includes 


APPENDICES  295 

parts  thereof.  The  Company  surrenders  voluntarily,  as  a  further 
evidence  of  good  will,  its  claim  to  the  northwestern  district  of 
Ankiu  Hsien.  It  retains,  however,  its  title  to  Chinshanwa  mining 
area  in  Changlo  Hsien  to  the  extent  of  10  li  from  Fangtze  mine 
in  a  straight  line. 

6.  For  the  purpose  of  delimiting  mining  areas  the  Provincial 
Authorities  of  Shantung  and  the  Mining  Company  have  jointly 
drawn  up  following  maps : 

1.  Tzechwan  mining  area  and  the  mining  area  from 
Chinglingchen  to  Changtien. 

2.  The  southern  section  of  the  Tzechwan  mining  area. 

3.  Mining  areas  in  Weihsien  and  Changlo  Hsien. 

4.  General  map  showing  all  mining  areas  delimited  by 
this  Agreement. 

ART.  2.  1.  Within  the  mining  areas  relinquished  by  the 
Mining  Company  in  the  three  Hsiens  of  Changkiu,  Tzechwan  and 
Poshan  along  the  Kiaochow-Chinan  Railway,  Chinese  are  not 
permitted  to  undertake  the  development  of  the  biggest  mine 
therein  before  the  year  1920,  but  they  shall  be  at  liberty  to  do 
so  after  that  year. 

2.  In  the  mining  areas  reserved  by  the  Company  all  Chinese 
mining  shafts  that  are  now  in  a  working  condition  shall  be 
stopped  within  one  month  from  the  date  of  a  formal  exchange  of 
the  texts  of  this  Agreement  duly  approved  by  the  Chinese  and 
German  Governments. 

3.  The  Chinese  Government  is  still  to  accord  protection  to 
the  works  of  the  Company  in  accordance  with  the  provisions  of 
the  Mining  Agreement  concluded  in  the  26th  year  of  Kwang  Hsu, 
corresponding  to  the  year  1900  A.  D. 

4.  Should  the  Chinese  Government  and  merchants  be  short  of 
capital  for  the  exploitation  of  the  mines  in  the  districts  relin- 
quished to  China  by  this  Agreement,  they  shall  approach  German 
capitalists  for  loans.     If  foreign  materials  and  machinery  are 
needed  they  shall  purchase  them  from  Germany.     If  foreign 
engineers  are  to  be  employed  they  shall  engage  German  engineers. 

ART.  3.  To  meet  the  expenditures  hitherto  incurred  by  the 
Company  for  prospecting  mines,  fixing  boundaries  and  pur- 
chasing lands,  the  Chinese  Government  agrees  to  pay  to  the 
Company  $210,000  Mex.,  the  said  sum  being  payable  within 
one  year  from  the  date  of  this  Agreement  in  two  installments. 
After  the  signing  of  this  Agreement  the  Company  shall  imme- 
diately turn  over  to  the  Chinese  Government  all  maps  and 


296  APPENDICES 

papers  relating  to  the  prospecting  of  these  mines  and  all  lands 
purchased  by  the  Company. 

ART.  4.  Chinglingchen  iron  mine  is  to  be  exploited  accord- 
ing to  the  Mining  Regulations  of  the  26th  year  of  Kwang  Hsu 
(1900).  If  China  desires  to  establish  iron  smelting  works  near 
the  mine  a  joint  stock  company  may  be  formed,  with  a  capital 
of  something  like  500,000  taels.  Regulations  therefor  are  to  be 
drawn  up  separately  at  the  proper  time. 

This  Agreement  is  executed  in  quadruplicate  copies  in  the 
Chinese  and  German  languages,  found  identical  in  sense,  together 
with  four  sets  of  maps  of  the  mines,  to  be  held  by  the  contracting 
parties. 

Third  year  of  Husan  Tung,  6th  month,  29th  day,  correspond- 
ing to  the  24th  day  of  July,  1911. 

Delimitation  Commissioners  of  the  Imperial 
Chinese  Government,  namely 

(Signed)     Su, 

Commissioner  for  the  Promotion  of  Indus- 
trial Affairs  at  Mukden. 

Yu, 
Expectant  Taotai  of  Shantung, 

MANAGING  DIRECTOR 

of  the  Chino-German 
Mining  Company. 

GERMAN  CONSUL  GENERAL 
at  Chinanfu,  Shantung. 


APPENDICES  297 

APPENDIX  E 

NOTES  ON  THE  ESTABLISHMENT  AND  THE  ABOLITION 
OF  THE  SPECIAL  WAR  ZONE 


The  Ministry  of  Foreign  Affairs  to  the  Diplomatic  Represen- 
tatives at  Peking  Respecting  Declaration  of  War  Zone 

Peking,  September  3rd,  1914. 
Your  Excellency: 

As  all  the  belligerents  engaged  in  the  present  European  war 
maintain  friendly  relations  with  our  country,  our  Government 
has  decided  to  declare  neutrality  and  maintain  same  with  all 
efforts.  Reports  from  the  local  authorities  in  the  Province  of 
Shantung  have  repeatedly  stated  that  German  troops  have  been 
engaged  in  military  preparations  in  and  near  Kiaochow  Bay, 
and  that  the  Japanese  and  British  Allied  troops  have  begun  also 
military  operations  in  Lungkow  and  in  places  near  Kiaochow 
Bay  and  Laichow.  It  is  very  unfortunate  that  Germany,  Japan, 
and  Great  Britain,  friends  of  our  country,  have  committed  such 
altogether  unexpected  acts  within  our  territory,  creating  an 
extraordinary  situation  analogous  to  the  Russo-Japanese  acts  of 
hostility  in  Liao-tung  Peninsula  in  the  year  of  1904.  The  only 
way  open  to  us  is  to  follow  that  precedent,  to  declare  that  so  far 
as  concerning  Lungkow,  Laichow  and  places  adjacent  to  Kiao- 
chow Bay  within  the  narrowest  possible  limits  absolutely  neces- 
sary for  military  operations  of  the  belligerent  troops,  our  Gov- 
ernment will  not  be  wholly  responsible  as  a  neutral  state ;  while 
in  all  other  places  within  our  territory,  the  Law  of  Neutrality 
which  has  already  been  promulgated  shall  remain  in  full  force. 
However,  within  the  districts  as  designated  above,  the  administra- 
tion as  well  as  territorial  jurisdiction,  the  safety  of  the  inhab- 
itants and  the  functionaries,  public  and  private  properties  shall 
be  fully  respected  by  the  belligerent  states. 

While  the  above  is  communicated  to  all  other  belligerent  States, 
I  request  Your  Excellency  to  have  the  goodness  of  transmitting 
the  same  to  your  Government. 

(Signed)     SUN  PAO-Cm. 


298  APPENDICES 

II 

First  Note  from  the  Ministry  of  Foreign  Affairs  to  the  British 
and  Japanese  Ministers  at  Peking,  Notifying  the  Cancella- 
tion of  the  War  Zone,  January  7th,  1915. 

Peking,  January  7th,  1915. 
Your  Excellency: 

On  September  3rd,  1914,  it  was  communicated  to  Your 
Excellency  that,  as  Great  Britain,  Japan,  and  Germany  were 
making  military  preparations  in  and  near  Kiaochow,  Lungkow 
and  Laichow,  and  as  all  the  belligerents  are  friends  to  China, 
our  Government  was  obliged  to  follow  the  precedent  established 
during  the  Russo-Japanese  War,  of  delimiting  a  minimum  area 
absolutely  necessary  for  military  actions  of  the  troops  of  both 
parties  to  the  war,  and  that  so  far  as  the  delimited  area  was 
concerned,  we  would  not  hold  ourselves  wholly  responsible  as  a 
neutral  State. 

Now,  as  the  hostilities  have  ceased,  and  all  military  prepara- 
tions have  been  entirely  withdrawn,  it  is  clear  that  there  will  be 
no  more  occasion  to  use  Lungkow  or  the  places  near  Kiaochow 
for  military  actions.  It  is,  therefore,  hereby  declared  that  all 
the  previous  communications  relating  to  the  delimitation  of  the 
war  zone  shall  be  cancelled,  and  that  the  original  status,  with 
said  area  be  restored. 

Wherefore  I  request,  through  you,  Your  Excellency,  that  your 
Government,  in  order  to  respect  the  neutrality  of  China,  with- 
draw all  the  troops,  if  there  is  still  any,  from  the  said  area. 

(Signed)     SUN  PAO-Cm. 


Ill 

Note  from  the  Japanese  Minister  aft  Peking  to  the  Ministry  of 

Foreign  Affairs  Refusing  to  Recognize  the  Cancellation 

of  the  War  Zone,  January  9th,  1915 

Peking,  January  9th,  1915. 
Your  Excellency: 

I  have  the  honour  to  acknowledge  the  receipt  of  your  note  of 
January  7th  stating :  that  as  Great  Britain,  Japan,  and  Germany 
were  making  military  preparations  in  Kiaochow,  Lungkow  and 
Laichow  the  Chinese  Government,  acting  upon  the  precedent  set 


APPENDICES  299 

during  the  Russo-Japanese  War,  has  delimited  a  minimum  area 
necessary  for  the  movement  of  troops  and  for  the  use  of  the 
troops  of  the  belligerent  States  and  that  now  as  the  hostilities 
have  ceased  and  the  military  measures  will  naturally  be  all  with- 
drawn, it  is  clear  that  there  will  be  no  more  necessity  of  using 
the  said  area,  and  therefore  all  the  previous  communications 
relating  to  delimiting  the  exceptional  area  be  cancelled,  its 
original  status  be  restored,  and  the  Japanese  troops  be  all  with- 
drawn. 

The  contents  of  the  above  note  were  immediately  reported 
to  our  Government,  from  which  a  telegraphic  instruction  has 
now  been  received  which  states: 

When  your  Government  brought  up  the  matter  in  question 
for  diplomatic  discussion,  the  Imperial  Government  declared 
that  a  reply  would  be  given  sooner  or  later,  and  also  courteously 
gave  the  reason  why  the  reply  was  delayed;  but  your  Govern- 
ment has  ignored  all  the  diplomatic  negotiations  in  the  past  and 
now  of  a  sudden  performs  an  act,  improper,  arbitrary,  betraying, 
in  fact,  want  of  confidence  in  international  good  faith  and 
regardless  of  friendly  relations.  We  can  not  acquiesce  therein 
under  any  circumstance. 

The  Imperial  Government  deems  it  necessary  to  declare  that 
even  if  your  Government  actually  cancels  the  communications 
concerning  the  creation  of  a  war  zone,  the  Imperial  Government 
would  not  permit  the  movement  and  actions  of  their  troops 
within  a  necessary  period  to  be  affected  or  restricted  by  such 
act  of  cancellation. 

The  above  are  my  instructions  which  I  have  the  honour  to 
communicate  to  Your  Excellency's  Government. 

(Signed)     HIOKI  EKI. 


IV 

Second   Note   from    the   Ministry    of   Foreign   Affairs    to    the 

Japanese  Minister  at  Peking  Respecting  the  Cancellation 

of  the  War  Zone,  January  16th,  1915. 

Your  Excellency: 

In  reply  to  your  note  of  the  9th  of  January,  I  regret  to  say 
that  there  exists  much  misunderstanding. 

When  Japan,  Great  Britain,  and  Germany,  friends  of  China, 


300  APPENDICES 

were  making  military  preparations  within  Chinese  territory,  our 
Government,  in  view  of  the  extraordinary  situation,  declared 
Lungkow,  Laichow,  and  places  near  Kiaochow,  within  the  nar- 
rowest possible  limits,  and  absolutely  necessary  for  the  operations 
of  the  troops  of  the  belligerent  States,  to  be  temporarily  a  special 
area  within  which  we  shall  not  be  responsible  as  a  neutral  State. 
This  step  was  taken  with  a  view  to  maintaining  international 
friendship  on  the  one  hand,  and  meeting  the  necessity  of  the 
international  situation  on  the  other.  We  made  that  special 
declaration  because  we  considered  it  necessary,  and  not  because 
we  had  any  agreement  to  that  effect  with  the  belligerent  States. 
As  our  declaration  was  an  independent  act,  so  now  we  cancel 
it  in  an  equally  independent  way — there  being  no  necessity  at  all 
to  secure  the  concurrence  of  any  party.  It  is  really  difficult  to 
see  how  you  can  consider  our  declaration  to  cancel  the  special 
area  arbitrary  or  inappropriate.  Two  months  have  elapsed  since 
the  capture  of  Tsingtao;  the  basis  of  German  military  prepara- 
tions has  been  destroyed,  the  troops  of  Great  Britain  have  already 
been,  and  those  of  your  country,  gradually  withdrawn.  This 
shows  clearly  that  there  is  no  more  military  action  in  the  special 
area,  and  that  the  said  area  ought  to  be  cancelled  admits  of  no 
doubt.  It  is  just  because  of  our  due  regard  for  international 
confidence  and  friendship  that  our  Government  postponed  a 
formal  declaration  to  cancel  what  ought  to  have  been  cancelled 
already  long  ago.  Furthermore,  within  the  last  two  months  we 
have  repeatedly  reminded  your  Government  of  the  desirability 
of  an  early  withdrawal  of  your  troops  so  as  to  effect  a  restoration 
of  order.  Notwithstanding  all  this,  the  matter  still  remains 
unsettled  today.  The  molestation  in  these  localities  and  the 
sufferings  of  the  inhabitants,  coupled  with  the  fact  that  the  port 
of  Tsingtao  has  already  been  opened  without  any  more  hindrance, 
have  led  our  Government  to  think  that  time  is  opportune  for 
cancellation,  and  to  wait  any  longer  would  be  simply  unreason- 
able ;  and  after  careful  deliberation,  we  finally  decided  to  make 
a  declaration  to  cancel  the  said  prescribed  area.  So  far  as  inter- 
national confidence  and  friendship  is  concerned,  we  have  nothing 
to  regret  on  our  part.  Moreover  at  the  outbreak  of  the  hostilities, 
your  Government  declared  the  preservation  of  peace  in  the  Far 
East  to  be  their  object.  Now,  our  declaration  to  cancel  the  pre- 
scribed zone  has  also  been  made  out  of  our  sincere  belief  in  and 
respect  for  the  principle  which  your  Government  has  been  cher- 
ishing. That  such  a  declaration  should  be  deemed  as  tending 


APPENDICES  301 

to   impair    international   confidence   and   friendship,    is   really 
beyond  our  comprehension. 

In  short,  we  prescribed  a  special  area  simply  because  there 
existed  a  special  situation  created  by  the  acts  of  the  belligerent 
States.  Now,  as  there  is  no  longer  any  such  special  situation,  the 
raison  d'etre  for  the  prescribed  area  ceases  to  exist.  7  As  eiforts 
have  always  been  made  to  effect  an  amicable  settlement  of  affairs 
between  your  country  and  ours,  it  is  our  earnest  hope  that  your 
Government  will  act  upon  the  principle  of  preserving  peace 
in  the  Far  East,  and  of  maintaining  international  confidence  and 
friendship  which  is  really  an  appropriate  and  well-meant  act — 
so  that  there  shall  be  no  further  misunderstanding  and  that  a 
state  of  complete  neutrality  in  the  said  area  should  be  restored. 

We  shall  be  much  obliged  if  you  will  be  so  good  as  to  transmit 
this  reply  to  your  Government. 

(Signed)     SUN  PAO-Cm. 


APPENDIX  F 

NOTES  PROTESTING  AGAINST  VIOLATION  OF  THE  NEUTRALITY  OF 
CHINA  AND  THE  OCCUPATION  OF  THE  KIAOCHOW-TSINAN  RAILWAY 


Note  from  the  Ministry  of  Foreign  Affairs  to   the  Japanese 
Minister  at  Peking  Protesting  Against  Violation  of  Neutrality 

September  27,  1914. 
Your  Excellency: 

A  telegram  received  from  the  local  authorities  in  the  Province 
of  Shantung  states  that  over  four  hundred  Japanese  soldiers 
have  arrived  at  Weihsieii  and  taken  possession  of  the  railway 
station. 

When  the  Japanese  and  British  Allied  Troops  needed  a  mili- 
tary passage  in  order  to  attack  Kiaochow,  our  country  was 
obliged  to  prescribe  a  war  zone,  and  also  declared  that  Japan 
and  Great  Britain  should  at  the  same  time  observe  strictly 
China's  neutrality  outside  the  zone.  On  the  7th  of  September, 
a  despatch  received  from  your  Government  stated  that  your 
Government  understood,  with  some  difficulty,  what  our  Govern- 
ment meant  in  that  declaration.  This  Ministry  further  declared 


302  APPENDICES 

that  the  railroad  from  Weihsien  to  Chinan  should  be  under 
Chinese  protection,  and  through  Your  Excellency  we  requested 
your  Government  to  issue  an  order  prohibiting  your  troops  from 
advancing  to  Weihsien,  or  to  any  place  west  of  Weihsien.  But 
now  the  troops  of  your  country  have  forced  their  way  into  Weih- 
sien and  taken  possession  of  the  railway.  Considering  that  the 
railroad  belongs  to  a  Sino-German  Corporation,  that  all  the  rail- 
way stations  have  also  been  under  Chinese  protection,  and  in 
none  of  them  has  there  ever  been  any  German  troop,  and  that 
Weihsien  is  in  the  purely  neutral  territory;  the  acts  committed 
by  the  troops  of  your  country  are  manifestly  contrary  to  the 
declaration  and  in  violation  of  China's  neutrality. 

Therefore,  we  request  Your  Excellency  to  transmit  this  note 
to  your  Government,  and  ask  your  Government  to  order  by 
telegraph  the  withdrawal  of  the  troops,  and  the  restoration  of 
the  railway  stations.  Such  acts  should  never  be  allowed  to  be 
repeated  again,  in  order  that  international  faith,  as  well  as  the 
law  of  neutrality  be  observed. 

We  wish  that  you  will  favour  us  with  a  reply. 

(Signed)     SUN  PAO-CHI. 


II 

First  Note  from  the  Ministry  of  Foreign  Affairs  to  the  Japanese 

Minister  at  Peking  Protesting  Against  the  Occupation  of 

the  Kiaochow -Chinan  Railway,  September  30,  1914 

September  30,  1914. 
Your  Excellency: 

Regarding  the  occupation  of  Weihsien  by  Japanese  troops  and 
the  violation  of  China's  neutrality,  a  despatch  was  sent  to  your 
Government,  together  with  a  memorandum  on  the  27th  instant. 
On  the  28th,  the  next  day,  Your  Excellency  came  to  the  Ministry 
and  stated  that  the  troops  of  your  country  would  soon  take  pos- 
session of  the  Kiaochow-Chinan  Railway,  whereupon  we  imme- 
diately and  emphatically  replied  that  we  could  not  accept  the 
reasons  you  advanced  therefor.  As  it  is  a  matter  of  grave  impor- 
tance, I  hereby  specially  make  a  formal  protest. 

The  Kiaochow-Chinan  Railway  has  been  constructed  and 
operated  jointly  by  Chinese  and  German  capitalists,  and  this  is 
clearly  provided  in  Section  II  of  the  Kiaochow  Convention  and 
in  Article  I  of  the  Kiaochow-Chinan  Railway  regulations.  It 


APPENDICES  303 

thus  becomes  clear  that  the  Railway  is  not  only  the  private 
property  of  the  German  merchants,  but  also  partly  owned  by  the 
Chinese  capitalists.  To  regard  this  line  as  the  public  property 
of  the  German  Government  is,  therefore,  a  fundamental  mistake. 
It  is  a  settled  principle  that  even  the  public  property  of  a  bellig- 
erent, while  on  a  neutral  territory,  can  not  be  attacked,  or  taken 
possession  of  by  the  other  belligerent,  much  more  so  in  the  present 
case  when  the  property  in  question  is  jointly  owned  by  Chinese 
and  German  capitalists.  How  can  your  Government  have  the 
least  pretext  for  taking  possession  of  it  ?  It  has  been  a  long  while 
since  the  troops  of  your  country  have  begun  to  attack  Tsingtao, 
and  the  German  troops  in  Tsingtao  have  been  isolated,  rendered 
helpless,  and  entirely  and  long  ago  cut  off  from  communication 
through  the  Kiaochow  Railway.  Not  only  our  Government  will 
never  allow  the  Germans  to  make  use  of  the  line,  it  is  actually 
beyond  their  power  to  make  use  of  it.  Therefore,  the  contem- 
plated action  of  your  country  is  decidedly  not  a  case  of  military 
necessity. 

When  the  Japanese  and  British  troops  directed  a  joint  attack 
upon  Kiaochow  Bay,  our  Government  was  obliged  to  prescribe 
a  special  zone.  But  outside  of  the  zone  we  are  determined  to 
maintain  strict  neutrality,  which  should  be  respected  by  all  the 
belligerents.  This  has  been  declared  by  our  Government  and 
accepted  by  your  Government.  As  to  the  protection  by  our 
Government  of  the  railways  from  Weihsien  to  Chinanfu,  the 
Ministry  also  made  a  special  declaration,  which  was  accepted 
by  Your  Excellency.  Now,  greatly  to  our  surprise,  the  troops  of 
your  country  have,  without  any  justification,  occupied  the  station 
in  Weihsien,  and  intimated  their  intention  to  advance  westward, 
and  Your  Excellency  has  even  informed  the  Ministry  that  they 
will  occupy  the  whole  railway.  Our  Government  is  obliged  to 
regard  both  the  contemplated  and  accomplished,  acts  as  contrary 
to  our  previous  understanding,  as  a  violation  of  China's  neu- 
trality, and  as  a  breach  of  international  law. 

Therefore,  we  make  this  formal  and  solemn  protest  and  request, 
through  Your  Excellency,  your  Government  for  the  sake  of  main- 
taining international  relations  to  order  the  troops  outside  the 
prescribed  area  to  be  withdrawn  as  soon  as  possible. 

We  wish  that  Your  Excellency  will  favour  us  with  an  imme- 
diate reply. 

(Signed)     SUN  PAO-Cm. 


304  APPENDICES 

III 

The  Japanese  Minister  at  Peking  to  the  Ministry  of  Foreign^ 

Affairs  Respecting  the  Protest  Against  the  Occupation  of 

the  Kiaochow -Chinan  Railway,  October  2nd,  1914 

October  2,  1914. 
Your  Excellency: 

I  have  the  honour  to  say  that  I  have  duly  received  your 
despatches  of  September  27th  and  September  29th  in  which 
your  honourable  Ministry  made  protests  regarding  the  occupation 
of  the  Weihsien  railway  station  by  the  troops  of  our  country. 
These  communications  along  with  the  request  for  your  approval, 
which  I  made,  under  instructions  from  my  Government,  to  your 
honourable  Minister,  in  person  on  September  28th,  for  the  trans- 
fer of  that  part  of  the  railway  between  Weihsien  and  Chinan  to 
the  control  and  management  of  my  country,  were  telegraphi- 
cally sent  to  my  Government.  Instructions  have  now  been 
received  from  my  Government  this  day,  and  I  have  the  honour 
to  reproduce  the  same  for  your  perusal,  as  follows : 

In  pursuance  of  the  policy  of  the  Imperial  Government  to 
definitely  uphold  the  peace  of  the  entire  Far  East,  and  for  the 
purpose  of  weakening  the  fundamental  influence  of  Germany 
in  the  said  region,  the  Japanese-German  War  was  declared.  The 
war  now  declared  has  for  its  aim  not  only  the  attack  on  the 
men-of-war  and  forts  of  the  enemy  in  the  leased  territory  of  the 
Kiaochow  Bay,  but  also  the  elimination  of  the  base  of  German 
activities  in  the  Far  East,  which  aim  has  been  repeatedly  com- 
municated to  the  Government  of  China,  and,  we  hope,  has  been 
clearly  understood. 

Regarding  the  Shantung  Railway,  it  was  the  outcome  of  the 
Treaty  of  lease  of  the  Kiaochow  Bay  between  Germany  and  China 
in  the  year  1898.  It  was  in  consequence  of  this  Treaty  that  Ger- 
many secured  the  right  of  building  this  railway,  the  Company 
of  which  is  entirely  under  the  control  of  the  German  Government, 
and  its  nature  is  public  and  in  no  way  different  from  a  purely 
German  Company.  It  is  of  the  same  character  as  the  leased  terri- 
tory. This  fact  is  beyond  dispute,  in  view  of  its  origin,  the  special 
charter  given  by  the  German  Government  and  the  way  in  which 
the  Company  draws  its  funds. 

Moreover  a  railway  from  its  very  nature  positively  can  not  be 
treated  one  part  separately  from  the  other.  Although  one  part  of 


APPENDICES  305 

this  German  owned  railway  is  situated  west  of  Weihsien,  it  can 
not  be  held  as  having  changed  its  character  on  the  ground  that  a 
part  remains  in  neutral  territory.  Besides,  the  aim  of  the  Impe- 
rial Government  is  not  only  to  overthrow  the  base  possessed  by 
the  enemy,  but  also  to  cause  the  control  and  administration  of 
this  indivisible  railway  to  fall  into  our  possession.  In  view  of  the 
war  this  does  not  seem  to  be  beyond  propriety.  It  is,  therefore, 
not  necessary  to  secure  the  approval  of  the  Chinese  Government 
as  to  the  execution  of  this  principle.  But  in  order  to  avoid  mis- 
understanding, we  have  made  friendly  request  for  approval 
regardless  of  the  urgency  of  the  situation.  It  is  surprisingly 
beyond  the  comprehension  of  the  Imperial  Government  for  the 
Chinese  Government  to  be  suspicious  of  Japan 's  every  movement. 
We  regret  for  such  a  condition. 

Kegarding  the  points  misunderstood  by  the  Chinese  Govern- 
ment, as  shown  in  the  two  documents,  we  point  out  as  follows : 

1°  Whether  the  Shantung  Railway  is  a  German  railway  or  a 
joint-interest  railway  can  be  determined  substantially  by  the 
special  permit  given  by  Germany.  As  to  the  governmental 
nature  of  the  said  railway,  there  can  be  no  doubt,  in  view  of 
what  has  been  said  above. 

2°  If  the  Shantung  Railway  can  not  be  held  as  being  the 
property  of  a  neutral,  how  can  it  be  said  of  our  violating  neu- 
trality if  it  is  transferred  to  our  control  ?  Now,  China,  in  conse- 
quence of  the  delimitation  of  the  war  zone,  suggests  to  change 
simultaneously  the  nature  of  the  Shantung  Railway.  The  Impe- 
rial Government  can  not  see  the  reason  why  China  should  do  so. 
Furthermore,  the  question  of  delimiting  the  war  zone  and  the 
question  of  the  nature  of  the  Shantung  Railway,  as  well  as  its 
control  and  administration,  are  clearly  separate  questions  which 
can  not  be  amalgamated  into  one. 

3°  Although  the  Chinese  Government  holds  that  under  the 
present  condition  the  Shantung  Railway  can  not  be  utilized  by 
the  German  troops  in  view  of  its  severance  with  Chinan,  yet  from 
the  attacking  troops'  point  of  view,  the  Railway  being  imme- 
diately behind  Tsingtao,  and  in  view  of  the  present  situation,  it 
is  a  serious  danger  to  the  military  operations  to  leave  a  railway 
owned  by  the  enemy  perfectly  free.  We  are,  therefore,  com- 
pelled to  secure  the  railway  by  all  means.  Moreover,  the  Chinese 
Government  has  often  failed  to  stop  the  assistance  of  the  enemy 
on  this  railway,  of  which  there  are  many  examples. 

4°  In  the  documents  the  Chinese  Government  emphatically 


306  APPENDICES 

declared  its  readiness  to  protect  the  railway  between  Weihsien 
and  Chinan,  which  declaration  is  said  to  have  been  agreed  to  by 
our  Government.  The  Imperial  Government  likes  to  be  informed 
as  to  what  this  refers  to. 

(Signed)     HIOKI  EKI. 

IV 

Second   Note   from   the   Ministry    of   Foreign   Affairs    to    the 
Japanese  Minister  at  Peking  Protesting  Against  the  Occupa- 
tion of  the  Kiaochow -Chinan  Railway,  October  9th,  1914 

Peking,  October  9th,  1914. 
Your  Excellency: 

I  have  the  honour  to  acknowledge  the  receipt  of  your  despatch 
dated  the  2nd  instant,  of  which  I  have  taken  notice.  But  our 
Government  can  not  concur  in  the  explanation  made  by  your 
Government  of  the  occupation  of  the  Kiaochow-Chinan  Railway. 

1.  That  the  Kiaochow-Chinan  Railway  is  private  property  is 
beyond  any  doubt.     In  Article  2  of  Sec.  II  of  the  Kiaochow 
Convention,  there  is  the  express  provision  that  "in  order  to 
carry  out  the  above-mentioned  railway  construction  a  Sino-  Ger- 
man Company  shall  be  formed";  and  in  Article  1  of  the  Regu- 
lations  made   in   1899   respecting   the   joint   construction   and 
maintenance  of  the  Kiaochow-Chinan  Railway,  it  is  stated  that 
the  construction  and  maintenance  of  the  railway  shall  be  under- 
taken by  a  Sino-German  Company.    All  these  stipulations  show 
very  clearly  that  the  railway  is  a  joint  stock  enterprise  of  Chinese 
and  German  merchants.    In  our  despatch  to  Your  Excellency  on 
September  29th,  we  mentioned  the  above  two  points,  to  which  we 
call  Your  Excellency's  attention;  but  in  your  reply  we  fail  to 
see  why  no  reply  was  made  to  these  two  points.    If  you  wish  to 
ascertain  the  real  and  definite  nature  of  that  railway — whether 
it  is  public  or  private  property — those  two  points  are  essential 
to  the  solution  of  the  question;  and  yet  they  have  apparently 
been  disregarded.    We  really  fail  to  discover  any  reason  for  such 
a  disregard. 

2.  The  protection  by  our  Government  of  the  railway  from 
Weihsien  to  Chinan  is  at  the  same  time  a  matter  of  our  right 
and  duty.    The  concurrence  of  your  Government  on  this  matter 
is,  strictly  speaking,  quite  unnecessary.     It  was  simply  out  of 
extra  caution  that  more  than  once  we  made  oral  declarations  to 
that  effect  before  Your  Excellency,  and  instructed  by  telegraph 


APPENDICES  307 

our  Minister  at  Tokyo,  M.  Lou  Tsung-yu,  to  make  the  same 
declaration  to  your  Government.  Since  your  Government  did 
not  express  any  objection  thereto,  we  have  certainly  the  right 
to  conclude  that  your  Government  has  tacitly  and  justly  recog- 
nized our  rights  and  duty. 

3.  During  the  present  unfortunate  war,  our  Government  has 
acted  in  accordance  with  international  law  and  maintained  strict 
neutrality,  particularly  we  have  paid  special  attention  to  Shan- 
tung affairs.     Your  Government  in  the  above-mentioned  reply 
alleged  that  our  Government  was  unable  to  prevent  acts  con- 
tributing to  strengthen  the  position  of  your  enemy  from  being 
done  on  the  railway.    From  such  an  allegation,  we  strongly  dis- 
sent; and,  as  there  is  no  evidence  produced,  we  do  not  know  to 
what  your  Government  referred. 

4.  Tsingtao  has  been  isolated  and  rendered  helpless ;  the  Kiao- 
chow-Chinan  Railway  has  been  guarded  by  our  troops  and  police 
in  the  section  of  400  li  west  of  Weihsien,  and  by  the  troops  of 
your  country  in  the  other  section  of  300  li  east  of  Weihsien ;  and, 
in  fact,  Tsingtao  is  so  surrounded  by  the  besieging  troops  that  no 
possible  assistance  can  be  expected  from  outside.    And  yet  your 
Government  said  that  the  situation  would  be  extremely  danger- 
ous, unless  that  portion  of  400  li  west  of  Weihsien  was  occupied 
by  the  troops  of  your  country.    In  fact,  we  fail  to  see  where  lies 
the  danger. 

5.  Your  country  has  announced  that  its  declaration  of  war 
against  Germany  was  for  the  purpose  of  preserving  peace  in  the 
Far  East.    Therefore,  only  the  disarmament  of  German  war  ves- 
sels and  the  restoration  of  Kiaochow  have  been  proclaimed. 
We  have  never  heard  of  the  so-called  elimination   of  the  base  of 
German  activities  in  the  East.    But  the  action  sought  to  be  justi- 
fied in  such  vague  terms  has  resulted  in  the  violating  of  China's 
neutrality,  and  in  the  occupation  of  property  within  the  territory 
of  a  friendly  nation  property  partly  owned  by  neutral  merchants. 
This  is  entirely  inconsistent  with  the  previous  declaration  of  your 
Government. 

Finding  the  situation  extremely  regrettable,  we  are  obliged 
hereby  again  to  make  a  strong  protest  in  the  hope  that  your 
Government  will,  in  compliance  with  our  request  made  in  the 
note  of  September  29th,  withdraw  all  the  troops  outside  the 
prescribed  area,  in  conformity  with  the  declared  principle  and 
observance  of  the  law  of  neutrality. 

(Signed)     SUN  PAO-CHI. 


308  APPENDICES 


APPENDIX  G 

China's  Declaration  of  War  on  Germany  and  Austria-Hungary, 
August  14,  1917 

On  the  9th  day  of  the  2nd  month  of  this  year  (February  9, 
1917)  the  Government  of  the  Republic  addressed  a  protest  to 
the  German  Government  against  the  policy  of  submarine  war- 
fare inaugurated  by  Germany,  which  was  considered  by  this 
Government  as  contrary  to  International  Law,  and  imperilling 
neutral  lives  and  property,  and  declared  therein  that  in  case 
the  protest  should  be  ineffectual  this  Government  would  be  con- 
strained, much  to  its  regret,  to  sever  diplomatic  relations  with 
Germany. 

Contrary  to  our  expectations,  however,  no  modification  was 
made  in  Germany's  submarine  policy  after  the  lodging  of  our 
protest.  On  the  contrary,  the  number  of  neutral  vessels  and 
belligerent  merchantmen  destroyed  in  an  arbitrary  and  illegal 
manner  was  daily  increasing  and  the  lives  of  our  citizens  lost 
were  numerous.  Under  such  circumstances,  although  we  might 
yet  remain  indifferent  and  endure  suffering,  with  the  meager 
hope  of  preserving  a  temporary  peace,  in  so  doing  we  would 
never  be  able  to  satisfy  our  people  who  are  devoted  to  righteous- 
ness and  sensible  to  disgrace,  nor  could  we  justify  ourselves 
before  our  sister  States  which  have  acted  without  hesitation  in 
obedience  to  the  dictates  of  a  sense  of  duty.  Both  here  and  in 
the  friendly  States,  the  cause  of  indignation  was  the  same,  and 
among  the  people  of  this  country  there  could  be  found  no  dif- 
ference of  opinion.  This  Government,  therefore,  being  compelled 
to  consider  its  protest  as  being  ineffectual,  notified  the  German 
Government  on  the  14th  day  of  the  3d  month  last  of  the  severance 
of  diplomatic  relations  and  at  the  same  time  the  events  taking 
place  from  the  beginning  up  to  that  time  were  announced  for 
the  general  information  of  the  international  public. 

What  we  have  desired  is  peace;  what  we  have  respected  is 
International  Law;  what  we  have  to  protect  are  the  lives  and 
property  of  our  own  people.  As  we  originally  had  no  other  grave 
causes  of  enmity  against  Germany,  if  the  German  Government 
had  manifested  repentance  for  the  deplorable  consequences 
resulting  from  its  method  of  warfare,  it  might  have  been  expected 
to  modify  this  policy  in  view  of  the  common  indignation  of  the 


APPENDICES  309 

whole  world.  That  was  what  we  have  eagerly  desired,  and  it 
was  the  reason  why  we  have  felt  reluctant  to  treat  Germany  as 
a  common  enemy.  Nevertheless,  during  the  five  months  follow- 
ing the  severance  of  diplomatic  relations,  the  submarine  attacks 
have  continued  exactly  as  before.  It  is  not  Germany  alone,  but 
Austria-Hungary  as  well,  which  has  adopted  and  pursued  this 
policy  without  abatement.  Not  only  has  International  Law  been 
thereby  violated,  but  also  our  people  are  suffering  injuries  and 
losses.  The  most  sincere  hope  on  our  part  of  bringing  about  a 
better  state  is  now  shattered. 

Therefore,  it  is  hereby  declared,  that  a  state  of  war  exists 
between  China  on  the  one  hand  and  Germany  and  Austria-Hun- 
gary on  the  other  commencing  from  ten  o'clock  of  this,  the  14th 
day  of  the  8th  month  of  the  6th  year  of  the  Republic  of  China. 

In  consequence  thereof,  all  treaties,  agreements,  and  conven- 
tions, heretofore  concluded  between  China  and  Germany,  and 
between  China  and  Austria-Hungary,  as  well  as  such  parts  of 
the  international  protocols  and  international  agreements  as 
concern  only  the  relations  between  China  and  Germany  and 
China  and  Austria-Hungary  are,  in  conformity  with  the  Law 
of  Nations  and  international  practice,  hereby  abrogated.  This 
Government,  however,  will  respect  the  Hague  Conventions  and 
its  international  agreements  respecting  the  humane  conduct  of 
war. 

The  chief  object  in  our  declaration  of  war  is  to  put  an  end  to 
the  calamities  of  war  and  to  hasten  the  restoration  of  peace.  All 
our  citizens  will  appreciate  this  to  be  our  aim.  Seeing,  however, 
that  our  people  have  not  yet  at  the  present  time  recovered  from 
sufferings  on  account  of  the  recent  political  disturbances  and 
that  calamity  again  befalls  us  in  the  breaking  out  of  the  present 
war,  I,  the  President  of  this  Republic,  can  not  help  having  pro- 
found sympathy  for  our  people  when  I  take  into  consideration 
their  further  suffering.  I  would  never  have  resorted  to  this 
step  which  involves  fighting  for  the  very  existence  of  our  nation, 
were  I  not  driven  to  this  unavoidable  decision. 

I  can  not  bear  to  think  that  through  us  the  dignity  of  Interna- 
tional Law  should  be  impaired,  or  our  position  in  the  family  of 
nations  should  be  undermined  or  the  restoration  of  the  peace 
and  happiness  of  the  world  should  be  retarded.  Let  the  people 
of  this  entire  nation  do  their  utmost  in  this  hour  of  trial  and 
hardship  in  order  to  safeguard  and  develop  the  national  existence 
of  the  Chung  Hua  Republic,  so  that  we  may  establish  ourselves 


310  APPENDICES 

amidst  the  family  of  nations  and  share  with  all  mankind  the 
prosperity  and  blessings  drawn  from  our  common  association. 
Let  this  proclamation  be  published  in  order  that  it  may  be  gen- 
erally known. 

[SEAL  OF  THE  PRESIDENT] 

Peking,  the  14th  day  of  the  8th  month,  the  6th  year  of  the 
Chung  Hua  Republic  (August  14th,  1917). 

Countersigned  by: 

TUAN  Cm-Jui, 
Premier   and   Minister    of         LIANG  CHI-CHAO, 

War.  Minister    of   Finance. 

WANG  TA-HSIEH,  Liu  KWAN-HSIUNG, 

Minister  of  Foreign  Affairs.  Minister  of  the  Navy. 

TANG  HUA-LUNG,  LING  CHANG-MING, 

Minister  of  the  Interior.  Minister  of  Justice. 

TSAO  Ju-LiN,  FAN  YUAN-LIEN, 

Minister  of  Communications.  Minister  of  Education. 

CHANG  KUO-KAN, 
Minister  of  Agriculture  and  Commerce. 


APPENDIX  H 

SECRET  AGREEMENTS  BETWEEN  CHINA  AND  JAPAN,  1918 

I 

Exchange  of  Notes  Between  the  Chinese  Minister  at  Tokio  and 

the  Japanese  Minister  for  Foreign  Affairs  Respecting  the 

Construction  of  Chinan-Shunteh  and  Kaomi-  Hsuchow 

Railways,  September  24th,  1918 

Note  from  Mr.  Tsung-Hsiang  Chang  to  the  Japanese 
Minister  for  Foreign  Affairs 

Tokio,  September  24,  1918. 
Monsieur  le  Ministre: 

The  Chinese  Government  has  decided  to  obtain  loans  from 
Japanese  capitalists  for  the  purpose  of  constructing  as  soon  as 
possible  the  railways  connecting  points  as  below  set  forth. 


APPENDICES  311 

Having  received  an  authorization  from  my  Government,  I  have 
the  honour  to  communicate  the  same  to  your  Government. 

1.  Between  Chinan  and  Shunteh; 

2.  Between  Kaomi  and  Hsu-chow. 

However,  in  case  the  above-mentioned  two  lines  are  deemed 
to  be  disadvantageous  from  the  point  of  view  of  railway  enter- 
prise, other  suitable  lines  will  be  decided  upon  by  consultation. 

Should  there  be  no  objection  to  the  above  proposition  it  is 
requested  that  your  Government  will  proced  forthwith  to  take 
the  necessary  steps  to  cause  Japanese  capitalists  to  agree  to 
enter  into  negotiations  for  loans  on  the  same. 

A  reply  to  the  above  communication  will  be  appreciated. 

(Signed)     TSUNG-HSIANQ  CHANG. 
His  Excellency,  BARON  SHIMPEI  GOTO,  etc. 

Baron  Goto  to  the  Chinese  Minister  at  Tokio 

Tokio,  September  24,  1918. 
Monsieur  le  Ministre: 

I  have  the  honour  to  acknowledge  the  receipt  of  Your  Excel- 
lency's note  of  this  day's  date  in  which  you  state  that  your 
Government  has  decided  to  obtain  loans  from  Japanese  capital- 
ists for  the  purpose  of  construction  as  soon  as  possible  the  rail- 
ways connecting  points  as  below  set  forth. 

(Quotes  Items  1 — 2  as  given  in  the  note  of  the  Chinese 
Minister. ) 

The  Imperial  Government  acknowledge  with  pleasure  the 
communication  of  the  Chinese  Government,  and  beg  to  state  in 
reply  that  they  will  proceed  forthwith  to  take  the  necessary  steps 
to  cause  Japanese  capitalists  to  agree  to  enter  into  negotiations 
for  loans  on  the  same. 

(Signed)     SHIMPEI  GOTO. 
His  Excellency,  MR.  TSUNG-HSIANG  CHANG,  etc. 

II 

Preliminary  Contract  Between  China  and  Japan  Respecting  the 
Chinan-Shunteh  and  Kaomi-Hsuchow  Railways, 

September  24th,  1918 

The  full  text  of  the  preliminary  contract  for  the  Chinan- 
Shunteh  and  Kaomi-Hsuchow  railways  construction  loan  is  as 
follows : 

For  the  construction  of  two  railways — one  from  Chinan  in  the 
Province  of  Shantung  to  Shunteh  in  the  Province  of  Chili,  the 


312  APPENDICES 

other  from  Kaomi  in  the  Province  of  Shantung  to  Hsuehow  in 
the  Province  of  Kiangsu  (hereafter  called  the  Two  Railways) 
— the  Government  of  the  Republic  of  China  (hereafter  called  the 
Government)  of  the  first  part,  and  the  Japanese  Industrial  Bank 
representing  the  three  banks,  the  Japanese  Industrial  Bank,  the 
Taiwan  Bank,  and  the  Chosen  Bank  (hereafter  called  the  Banks) 
of  the  second  part,  hereby  make  the  following  preliminary  con- 
tract as  a  basis  for  the  conclusion  of  a  formal  loan  contract. 

ART.  1.  The  Government  agrees  that  to  meet  all  the  expenses 
necessary  for  the  construction  of  the  railway  from  Chinan,  in  the 
Province  of  Shantung,  to  Shunteh,  in  the  Province  of  Chili,  and 
that  from  Kaomi,  in  the  Province  of  Shantung,  to  Hsuchow,  in 
the  Province  of  Kiangsu,  the  Banks  shall  issue  Chinese  Govern- 
ment Chinan- Shunteh  Railway  Gold  and  Kaomi-Hsuchow  Rail- 
way Gold  Bonds  (hereafter  called  bonds  of  the  Two  Railways). 
But  to  assure  the  success  of  the  Chinan-Shunteh  and  Kaomi- 
Hsuchow  lines,  if  as  a  railway  enterprise  the  location  of  the 
lines  should  be  found  to  be  not  advantageous,  the  Government 
may  arrange  with  the  Banks  to  change  the  location  of  the  lines. 

ART.  2.  The  Government  will  soon  determine  the  amount 
required  for  the  construction  and  of  all  other  necessary  expenses, 
and  secure  concurrence  of  the  Banks  therefor. 

ART.  3.  The  bonds  of  the  Two  Railways  shall  expire  at  the 
end  of  40  years  dating  from  the  day  of  issue.  Repayment  shall 
begin  from  the  eleventh  year  and  be  made  in  accordance  with 
a  plan  of  amortization. 

ART.  4.  As  soon  as  the  formal  contract  shall  have  been  made, 
the  construction  work  shall  begin  so  that  the  railroads  may  be 
completed  in  a  short  time. 

ART.  5.  The  Government  pledges  the  following  as  security 
for  the  repayment  of  the  principal  and  interest  on  the  bonds  of 
the  Two  Railways;  all  properties  now  belonging  or  will  in  the 
future  belong  to  the  Chinan-Shunteh  and  Kaomi-Hsuchow  Rail- 
ways. 

Without  the  consent  of  the  Banks,  the  Government  shall  not 
pledge  away  to  any  other  party  as  security  or  guarantee  any 
part  of  the  property  or  its  income  which  at  present  belongs,  or 
will,  in  future,  belong  to  Chinan-Shunteh  and  Kaomi-Hsuchow 
Railways. 

ART,  6.  The  price  of  issue  of  the  railways '  bonds,  the  interest 
thereon,  and  the  actual  amount  to  be  received  by  the  Government 
shall  be  agreed  upon  according  to  the  circumstances  at  the  time 


APPENDICES  313 

of  issue  always,  however,  with  a  view  to  the  best  interests  of  the 
Government. 

ART.  7.  Conditions  which  have  not  been  provided  for  in  the 
preceding  articles  shall  be  decided  between  the  Government  and 
the  Banks  in  common  accord. 

ART.  8.  A  formal  contract  for  the  Chinan-Shunteh  and 
Kaomi-Hsuchow  Railway  loan  shall  be  based  on  this  preliminary 
contract,  and  be  made  within  four  months  from  the  date  of  this 
contract. 

ART.  9.  On  the  conclusion  of  this  preliminary  contract,  the 
Banks  will  advance  to  the  Government  20,000,000  yen  in  the  full 
amount  without  any  discount  whatsoever. 

ART.  10.  The  rate  of  interest  on  the  said  advance  shall  be 
eight  per  cent,  per  annum,  that  is  to  say,  every  one  hundred  yen 
shall  bear  a  yearly  interest  of  eight  yen. 

ART.  11.  The  said  advance  shall  be  paid  against  the  delivery 
of  national  treasury  notes  issued  by  the  Government,  according 
to  their  actual  value. 

ART.  12.  The  national  treasury  notes  referred  to  in  the  pre- 
ceding article  shall  be  renewed  every  six  months,  and  upon  each 
renewal,  the  interest  thereon  for  the  six  months  shall  be  paid 
to  the  Banks. 

ART.  13.  After  a  formal  contract  for  the  Chinan-Shunteh 
and  Kaomi-Hsuchow  Railway  loan  has  been  made,  the  Govern- 
ment shall  appropriate  the  proceeds  realized  from  the  sale  of 
the  above-said  bonds  in  payment,  by  priority,  and  without  delay, 
of  the  above  advance. 

ART.  14.  The  payment  of  the  said  advance  and  of  the  inter- 
est thereon,  its  repayment,  and  all  other  transactions  connected 
therewith,  shall  be  made  at  Toyko,  Japan.  This  preliminary 
contract  is  made  in  two  Japanese  copies,  and  two  Chinese  copies, 
the  Government  and  Banks  shall  each  keep  one  copy  of  each 
language.  In  case  of  doubt  in  interpretation,  the  Japanese  text 
shall  prevail. 

The  24th  day,  9th  month,  7th  year  of  the  Republic  of  China. 

(Signed)     TSUNG-HSIANG  CHANG, 

Chinese  Minister. 
A.  ONO, 
V 'ice-President  of  the  Japanese 

Industrial  Bank. 


314  APPENDICES 

III 

Exchange  of  Notes  Between  the  Chinese  Minister  art  Tokio  and 

the  Japanese  Minister  for  Foreign  Affairs  Respecting 

Adjustment  of  Questions  Concerning  Shantung, 

September  24th,  1918 

Note  from  Baron  Goto  to  the  Chinese  Minister  at  Tokio 

Tokio,  September  24,  1918. 
Monsieur  le  Ministre : 

The  Japanese  Government,  mindful  of  the  amicable  relations 
between  our  two  countries  and  out  of  a  spirit  of  friendly  co-opera- 
tion, propose  to  adjust  all  the  questions  relating  to  Shantung 
in  accordance  with  the  following  articles: 

1.  Japanese    troops    along    the    Kiaochow-Chinan    Railway, 
except  a  contingent  of  them  to  be  stationed  at  Chinanfu,  shall 
be  withdrawn  to  Tsingtao. 

2.  The  Chinese  Government  may  organize  a  police  force  to 
undertake  the  policing  of  the  Kiaochow-Chinan  Railway. 

3.  The  Kiaochow-Chinan  Railway  is  to  provide  a  reasonable 
amount  to  defray  the  expense  for  the  maintenance  of  the  above- 
mentioned  police  force. 

4.  Japanese  are  to  be  employed  at  the  headquarters  of  the 
above-mentioned  police  force  at  the  principal  railway  stations 
and  at  the  police  training  school. 

5.  Chinese  citizens  shall  be  employed  by  the  Kiaochow-Chinan 
Railway  Administration  as  part  of  its  staff. 

6.  The    Kiaochow-Chinan    Railway,    after    its    ownership    is 
definitely  determined,  is  to  be  made  a   Chino- Japanese  joint 
enterprise. 

7.  The  civil  administration  established  by  Japan  and  existing 
now  is  to  be  abolished. 

The  Japanese  Government  desire  to  be  advised  of  the  attitude 
of  your  Government  regarding  the  above-mentioned  proposals. 

(Signed)     SHIMPEI  GOTO. 
His  Excellency,  MR.  TSUNG-HSIANQ  CHANG,  etc. 

Mr.  Tsung-Hsiang  Chang  to  the  Japanese  Minister 
for  Foreign  Affairs 

Tokio,  September  24,  1918. 
Monsieur  le  Ministre: 

I  have  the  honour  to  acknowledge  the  receipt  of  Your  Excel- 
lency's note  stating: 


APPENDICES  315 

The  Japanese  Government,  mindful  of  the  amicable  relations 
between  our  two  countries  and  out  of  a  spirit  of  friendly 
co-operation,  propose  to  adjust  all  the  questions  relating  to  Shan- 
tung in  accordance  with  the  following  articles: 

(Quotes  Items  1-7  as  contained  in  the  note  of  the  Japanese 
Minister  for  Foreign  Affairs.) 

In  reply,  I  have  the  honour  to  state  that  the  Chinese  Govern- 
ment are  pleased  to  agree  to  the  above-mentioned  Articles  pro- 
posed by  the  Japanese  Government. 

(Signed)     TSUNG-HSIANG  CHANG. 
His  Excellency,  BARON  SHIMPEI  GOTO,  etc. 


IV 

Exchange  of  Notes  Between  the  Chinese  Minister  at  Tokio  and 

the  Japanese  Minister  for  Foreign  Affairs  for  Building 

Four  Railroads  in  Manchuria  and  Mongoliaf 

September  24th,  1918  * 

Note  from  Mr  Tsung-Hsiang  Chang  to  the  Japanese 
Minister  for  Foreign  Affairs 

Tokio,  September  24,  1918. 
Monsieur  le  Ministre: 

The  Chinese  Government  have  decided  to  obtain  loans  from 
Japanese  capitalists  for  the  purpose  of  building  as  soon  as 
possible  the  railways  connecting  the  points  as  below  set  forth. 
Having  received  an  authorization  from  my  Government,  I  have 
the  honour  to  communicate  the  same  to  your  Government. 

1.  Between  Kai-yuan,  Hailung  and  Kirin; 

2.  Between  Changchun  and  Taonan; 

3.  Between  Taonan   and  Dalny    (?); 

4.  From  a  point  between  Taonan  and  Jehol  to  some  seaport 
(this  line  to  be  determined  in  future  after  an  investiga- 
tion). 

Should  there  be  no  objection  to  the  above  propositions  it  is 
requested  that  your  Government  will  proceed  forthwith  to  take 

*  These  two  notes  have  no  direct  bearing  upon  the  Shantung  question. 
They  are  reproduced  here  for  two  reasons:  that  they  were  originally 
included  among  the  Chino- Japanese  secret  agreements  given  out  at  the 
Versailles  Peace  Conference,  and  that  the  four  railways  granted  to  Japan 
in  the  notes  are  of  unusual  strategic  and  economic  significance. 


316  APPENDICES 

the  necessary  steps  to  cause  Japanese  capitalists  to  agree  to 
enter  into  negotiations  for  loans  on  the  same. 

A  reply  to  the  above  communication  will  be  appreciated. 

(Signed)     TSUNG-HSIANG  CHANG. 
His  Excellency,  BARON  SHIMPEI  GOTO,  etc. 


Baron  Goto  to  the  Chinese  Minister  at  Tokio 

Tokio,  September  24,  1918. 
Monsieur  le  Ministre: 

I  have  the  honour  to  acknowledge  the  receipt  of  Your  Excel- 
lency's note  in  which  you  state  that  your  Government  have 
decided  to  obtain  loans  from  Japanese  capitalists  for  the  purpose 
of  constructing  as  soon  as  possible  the  railways  connecting  points 
as  below  set  forth. 

(Quotes  Items  1-4  as  contained  in  the  note  of  the  Chinese 
Minister.) 

The  Imperial  Government  acknowledge  with  pleasure  the 
communication  of  the  Chinese  Government,  and  beg  to  state 
in  reply  that  they  will  promptly  take  the  necessary  steps  to 
cause  Japanese  capitalists  to  agree  to  enter  into  negotiations 
for  loans  on  the  same. 

(Signed)     SHIMPEI  GOTO. 
His  Excellency,  MR.  TSUNG-HSIANG  CHANG,  etc. 


Preliminary  Contract  for  Loans  to  Build  Four  Railroads  in 
Manchuria  and  Mongolia,  September  28th,  1918 

The  Chinese  Government  (hereafter  called  the  Government), 
for  the  purpose  of  building  four  railroads : 

1.  Prom  Jehol  to  Taonan, 

2.  From  Changchun  to  Taonan, 

3.  From  Kirin  via  Hailung  to  Kai-yuan. 

4.  From  a  point  between  Jehol  and  Taonan  to  some  point  on 
the  sea  coast  (the  said  four  roads  to  be  hereafter  mentioned  as 
the  four  roads  in  Manchuria  and  Mongolia)  and  as  a  prepara- 
tory measure  for  a  formal  contract,  hereby  concludes  with  the 
syndicate  represented  by  the  Japanese  Industrial  Bank  and 
composed   of: 

1.  The  Japanese  Industrial  Bank; 


APPENDICES  317 

2.  The  Taiwan  Bank; 

3.  The  Chosen  Bank; 

(hereafter  mentioned  as  the  Banks)  the  following  Prelim- 
inary Contract: 

ART.  1.  The  Government  authorizes  the  aforementioned  Jap- 
anese Banking  Syndicate  to  issue: 

1.  Chinese  Government  Jehol-Taonan  R.  R.  Gold  Bonds. 

2.  Chinese  Government  Changchun-Taonan  R.  R.  Gold  Bonds. 

3.  Chinese  Government  Kirin-Kai-yuan  R.  R.  Gold  Bonds. 

4.  Chinese  Government  (name  to  be  determined)  R.  R.  Gold 
Bonds  (hereafter  to  be  designated  as  Manchuria-Mongolia 
4  Railway  Bonds)   to  cover  the  constructing  expenses  of 
the  above-mentioned  four  R.  R. 

The  Government  and  the  Banks  shall  conjointly  determine  the 
point  on  the  Jehol-Taonan  R.  R.  to  be  connected  to  some  seaport 
and  the  route  to  be  taken  by  the  R.  R.  connecting  said  point 
with  said  seaport. 

ART.  2.  The  Government  shall  determine  as  soon  as  possible 
the  constructing  and  other  expenses  needed  by  the  four  R.  R. 
and  shall  obtain  the  agreement  of  the  Banks  in  respect  thereof. 

ART.  3.  The  Gold  Bonds  of  the  four  R.  R.  shall  expire  at 
the  end  of  forty  years,  counting  from  the  date  of  issue  of  said 
bonds. 

Beginning  with  the  eleventh  year  from  the  date  of  issue,  the 
repayment  of  the  said  bonds  shall  commence  in  accordance  with 
a  system  of  amortization. 

ART.  4.  When  the  Formal  Contract  for  the  loan  to  build 
the  four  R.  R.  is  concluded,  the  Chinese  Government  shall  con- 
jointly with  the  Banks  decide  on  an  engineering  program  of 
construction  and  construction  shall  begin  with  a  view  to  the 
speedy  completion  of  the  said  R.  R. 

ART.  5.  As  guarantee  for  the  capital  and  interest  of  the 
Gold  Bonds,  the  Government  shall  pledge  to  the  Banks  the 
present  and  future  property  and  income  of  the  four  R.  R. 

Unless  with  the  consent  of  the  Banks  the  Government  shall 
not  pledge  the  above-mentioned  property  and  income  as  guar- 
antee or  security  to  any  other  party. 

ART.  6.  The  price  of  issue,  the  rate  of  interest  and  the 
actual  amount  to  be  received  by  the  Government  in  respect  of 
the  Gold  Bonds  shall  be  determined  in  accordance  with  the 
conditions  at  the  time  of  issue  of  said  bonds,  always,  however, 
to  the  best  interests  of  the  Government. 


318  APPENDICES 

ART.  7.  The  Government  and  the  Banks  shall  conjointly 
decide  on  matters  not  covered  by  the  above  articles. 

ART.  8.  The  present  Preliminary  Contract  shall  form  the 
basis  for  a  Formal  Contract  which  shall  be  concluded  within  four 
months  from  the  conclusion  of  the  present  Preliminary  Contract. 

ART.  9.  The  Banks,  after  the  conclusion  of  the  Preliminary 
Contract,  shall  advance  to  the  Government  Yen  2,000,000  to  be 
paid  in  full  and  without  discount. 

ART.  10.  The  interest  of  the  above-mentioned  advance  shall 
be  eight  per  cent  per  annum,  to  wit,  for  every  one  hundred  yen 
there  shall  be  eight  yen  as  annual  interest. 

ART.  11.  The  above-mentioned  advance  shall  be  paid  against 
the  delivery  of  the  National  Treasury  Notes  issued  by  the  Gov- 
ernment at  their  actual  value. 

ART.  12.  The  said  National  Treasury  Notes  shall  be  renewed 
every  six  months,  each  time  with  the  payment  of  six  months7 
interest. 

ART.  13.  When  the  Formal  Contract  for  loans  to  build  the 
four  R.  R.  is  concluded,  the  advance  shall  have  priority  of 
repayment  from  the  proceeds  of  the  Gold  Bonds. 

ART.  14.  The  payment  of  both  the  interest  and  the  advance 
and  other  transactions  connected  therewith  shall  take  place 
in  Tokio. 

Copies  of  this  Preliminary  Contract  shall  be  prepared  in  both 
the  Chinese  and  Japanese  languages,  two  copies  in  each  language. 
The  Government  and  the  Banks  shall  each  be  furnished  with 
two  copies,  one  in  each  language. 

In  case  of  disagreement  in  the  interpretation  of  the  Prelim- 
inary Contract  the  Japanese  language  shall  prevail. 

Done  this  Twenty-eighth  Day  of  Ninth  Month  of  the  Seventh 
Year  of  the  Republic  of  China. 

This  Twenty-eighth  Day  of  Ninth  Month  of  the  Seventh  Year 
of  the  Reign  of  Taisho  of  the  Imperial  Government  of  Japan. 

TSUNG-HSIANG  CHANG, 
Envoy  Extraordinary  and  Minister  Pleni- 
potentiary of  the  Republic  of  China  to 
Japan. 
A.  ONO, 

V 'ice-President  of  the  Japanese  Industrial 
Bank. 


APPENDICES  319 


APPENDIX  I 

MEMORANDUM  PRESENTED  TO  THE  PEACE  CONFERENCE  AT  VER- 
SAILLES BY  THE  CHINESE  DELEGATION  CONTAINING  PROVISIONS 
FOR  INSERTION  IN  THE  PRELIMINARIES  OF  PEACE  WITH 
GERMANY 

I. — Memorandum 

In  formulating  the  provisions  herewith  presented  for  inser- 
tion in  the  Preliminaries  of  Peace  with  Germany,  the  Chinese 
Government  are  animated  mainly  by  a  desire  to  have  restored 
to  China  the  territory,  rights  and  property  which  were  originally 
obtained  from  her  by  either  intimidation  or  by  aeutal  force,  and 
to  remove  certain  restrictions  on  her  freedom  of  political  and 
economic  development. 

An  engagement  to  ratify  the  International  Opium  Convention 
of  January  23,  1912,  concluded  at  The  Hague,  is  asked  of 
Germany,  because  her  refusal  to  ratify  it,  it  will  be  recalled, 
was  largely  responsible  for  the  delay  in  its  execution.  Her  ful- 
filment of  this  obligation  will  mean  the  removal  of  one  of  the 
obstacles  to  the  accomplishment  of  the  admirable  purpose  under- 
lying this  important  international  instrument,  a  purpose  not  only 
consonant  with  the  highest  interests  of  China  but  conducive  to 
the  common  welfare  of  the  world. 

The  Chinese  Government  hope  and  trust  that  the  representa- 
tives of  all  the  Associated  Governments  at  the  Preliminary  Peace 
Conference  will  give  such  endorsement  and  support  to  the 
accompanying  provisions  as  will  insure  their  full  acceptance 
by  Germany. 

II. — Provisions  for  Insertion  in  the  Preliminaries 
of  Peace  with  Germany 

ARTICLES 

I. — Termination  of  Treaties  between  China  and  Germany 
by  War  and  the  Opening  of  Tsingtao  to  foreign  trade 
and  residence. 

II. — New  Treaty  of  Commerce  and  General  Relations  to  be 
based  upon  the  principles  of  Equality  and  Reciprocity, 
with  Germany  relinquishing  that  of  Most-Favored 
Nation  Treatment. 


320  APPENDICES 

III. — Withdrawal  of  Germany  from  Protocol  of   September 

7,  1901. 

IV. — Cession  of  German  Public  Property  in  Chinese  Territory. 
V. — Compensation   for   losses   of    Chinese   Government   and 

Nationals. 

VI. — Reservation  of  Right  of  Claiming  War  Indemnity. 
VII. — Reimbursement  of  Expenses  for  Internment  and  Main- 
tenance of  Prisoners  of  War. 
VIII. — Restitution    of    Astronomical    Instruments    and    other 

Works  of  Art. 

IX. — Engagement  to  ratify  International  Opium  Convention 
of  January  23,  1912. 


The  state  of  war  between  China  and  Germany  having  termi- 
nated all  treaties,  conventions,  protocols,  agreements,  contracts 
and  other  arrangements  between  them,  consequently  all  rights, 
privileges,  concessions,  immunities  and  tolerances  granted 
therein,  or  based  thereupon,  or  accruing  therefrom,  including 
notably  the  leasehold  rights  of  Kiaochow  Bay,  the  Railway  and 
Mining  concessions  and  other  rights  and  options  in  relation  to 
the  Province  of  Shantung,  have  reverted  to  China  and  or  ceased 
to  exist. 

The  Chinese  Government,  being  desirous  of  promoting  interna- 
tional trade  and  the  principle  of  equal  opportunity  for  the  com- 
merce and  industry  of  all  nations  in  Shantung  Province  as  in 
other  parts  of  the  Republic,  intend,  as  soon  as  they  have 
regained  possession  of  the  leased  territory  of  Kiaochow,  to 
open  Tsingtao  therein  and  other  suitable  places  in  Shantung 
Province  to  foreign  trade  and  residence. 

II 

Germany  engages  to  adopt  the  principles  of  equality  and  reci- 
procity as  the  basis  of  a  new  treaty  of  commerce  and  general 
relations  to  be  concluded  with  China  and  to  relinquish  therein 
on  her  part  the  principle  of  the  so-called  most-favored  nation 
treatment;  and  the  said  new  treaty,  when  concluded,  shall 
guide  all  intercourse  between  the  two  countries  in  future. 

From  the  signing  of  the  Preliminaries  of  Peace  until  the  con- 
clusion and  operation  of  such  a  treaty,  the  tariffs,  dues  and 
regulations  which  are  or  may  be  applied  to  the  ships  and  mer- 
chandise of  non-treaty  powers  shall  be  applicable  to  German 


APPENDICES  321 

ships  and  the  merchandise  of  German  origin  or  manufacture, 
it  being  mutually  understood  that  China  may,  in  accord  with 
the  common  policy  of  the  Associated  Powers,  prohibit  or  restrict 
resumption  of  trade  relations  between  China  and  Germany 
within  the  above-mentioned  period. 

Ill 

Germany,  considering  herself  to  have  withdrawn,  on  August 
14,  1917,  from  the  Protocol  of  September  7,  1901,  including  all 
Annexes  as  well  as  all  Notes  and  Documents  supplementary 
thereto,  relinquishes  to  China  all  the  rights,  privileges  and 
claims  accruing,  therefrom  or  acquired  thereunder,  and  waives 
to  China,  furthermore,  her  portion  of  the  indemnity  due  under 
the  said  Protocol  for  the  period  between  March  14,  1917,  and 
August  14,  1917. 

IV 

Germany  cedes  to  China  all  the  buildings,  wharves,  barracks, 
forts,  arms  and  munitions  of  war,  vessels  of  all  kinds,  marine 
cables,  wireless  installations  and  other  public  property  belong* 
ing  to  the  German  Government  which  are  found  in  the  German 
concessions  in  Tientsin  and  Hankow  and  in  other  parts  of 
Chinese  territory,  including  that  portion  of  Kiaochow  formerly 
leased  to  Germany. 

It  is  understood,  however,  that  buildings  and  establishments 
used  as  diplomatic  or  consular  offices  or  residences  are  not 
included  in  the  above  act  of  cession. 

Subject  to  the  following  paragraph  of  this  Article  and  reserv- 
ing the  right  to  revoke  this  decision  in  accord  with  the  common 
policy  of  the  Associated  Powers,  China  consents  to  restore  all 
private  property  of  German  subjects  seized  or  sequestrated  by 
her  on  or  after  the  declaration  of  the  existence  of  a  state  of 
war  betwen  China  and  Germany,  except  where  the  Chinese 
Government  deems  such  restoration  impossible  or  incompatible 
with  China's  public  interests,  in  either  of  which  cases  she  may 
exercise  the  right  of  free  disposal  and  make  compensation  to 
the  lawful  owners. 

Germany,  however,  agrees  to  China's  withholding  all  such 
private  property  or  the  proceeds  from  its  sale,  pending  the  satis- 
faction of  the  claims  of  the  Chinese  Government  and  nationals 
referred  to  in  Articles  V  and  VI  below;  and,  after  the  said 


322  APPENDICES 

claims  are  satisfied,  then  in  trust  for  the  Powers  associated  with 
China  in  the  war,  for  meeting  the  claims  they  or  their  subjects  or 
citizens  may  prefer  against  Germany. 

V 

Germany  agrees  to  compensate  the  Chinese  Government  and 
nationals  for  losses  they  have  sustained  in  consequence  of  the 
war. 

VI 

China  reserves  her  right  of  preferring  a  claim  against  Ger- 
many for  indemnity  of  war  expenses  in  accord  with  the  decision 
of  the  Preliminary  Peace  Conference. 

VII 

Germany  engages  to  pay  all  the  expenses  for  the  internment 
and  maintenance  of  the  prisoners  of  war  and  civilians,  incurred 
by  the  Chinese  Government,  less  the  expenses  of  like  nature 
incurred  by  the  German  Government. 

VIII 

Germany  engages  to  restore  to  China,  within  12  calendar 
months  from  the  date  of  signature  of  the  Preliminaries  of  Peace, 
all  the  astronomical  instruments  and  other  works  of  art  which 
her  troops  removed  in  1900-1901  from  China  without  the  latter 's 
consent,  and  defray  all  expenses  which  may  be  incurred  in 
effecting  such  restoration,  including  the  expenses  of  dismounting, 
packing,  transporting,  insurance  and  installation  in  Peking. 

IX 

Germany  engages  to  ratify  and  put  in  operation,  within  six 
months  from  the  date  of  signature  of  the  Preliminaries  of 
Peace,  the  International  Opium  Convention  concluded  at  The 
Hague,  January  23,  1912. 


APPENDICES  323 


APPENDIX  J 

THE  CLAIM  OF  CHINA  FOR  DIRECT  RESTITUTION  TO  HERSELF  OF 

THE  LEASED  TERRITORY  OF  KIAOCHOW,  THE  TSINGTAO-CHINAN 

RAILWAY  AND  OTHER  GERMAN  RIGHTS  IN  RESPECT  OF 

SHANTUNG  PROVINCE 

A — Origin  and  Extent  of  Germany's  Leasehold  and  Other 
Rights  Respecting  Shantung 

1.  The  German  Asiatic  squadron,  in  search  of  a  suitable  naval 
base  and  maritime  harbour  in  the  Far  East,  had  made  laborious 
cruises  along  the  Chinese  coast  and  an  official  German  Commis- 
sion had  recommended  the  Bay  of  Kiaochow  as  the  most  desirable 
spot,  when  the  killing  of  two  German  missionaries  in  November, 
1897,  in  the  interior  of  Shantung  Province,  in  circumstances 
beyond  the  control  of  the  local  authorities,  afforded  the  German 
Government  the  long  sought  for  pretext  for  resorting  to  force  in 
order  to  attain  their  object.    Four  German  men-of-war,  by  order 
of  the  Kaiser,  landed  an  expeditionary  force  on  the  coast  of 
Kiaochow  Bay  and  forthwith  announced  their  occupation  of 
the  territory.    In  the  face  of  imminent  danger  from  the  presence 
of  German  troops  on  Chinese  territory,  the  Chinese  Government 
was  constrained  to  conclude  with  Germany  the  Convention  of 
March  6,   1898. 

2.  It  was  under  this  Convention  that  China  set  aside  a  zone 
of  50  kilometers  around  the  Bay  of  Kiaochow  at  high  water  for 
the  passage  of  German  troops  therein  at  any  time  while  reserving 
to  herself  all  rights  of  sovereignty;  and  granted  to  Germany  a 
lease  for  ninety-nine  years  of  both  sides  of  the  entrance  to  the 
Bay  of  Kiaochow  with  a  certain  number  of  islands. 

3.  Germany  obtained  under  the  same  Convention  the  con- 
cession to  construct  two  lines  of  railway  in  Shantung  and  to 
develop  mining  properties  for  a  distance  of  15  kilometers  from 
each  side  of  these  railways.    Both  the  railways  and  mining 
enterprises  were  to  be  undertaken  by  Sino-German  Companies 
to  be  organized  for  the  purpose,   and   Chinese   and   German 
merchants  alike  might  subscribe  to  their  share  of  stock  and 
appoint  directors  for  their  management.     Besides,  the  Chinese 
Government  was  made  to  engage  that  in  all  cases  where  foreign 
assistance,  in  personnel,  capital  or  material,  might  be  needed 
for  any  purpose  whatever  within  the  Province  of  Shantung, 


324  APPENDICES 

an  offer  should  be  made  in  the  first  instance  to  German  manu- 
facturers and  merchants. 

The  Tsingtao-Chinan  Railway  and  branch,  434  kilometers  in 
all,  was  one  of  the  two  lines  authorized,  financed  arid  constructed 
by  the  Schantung  Eisenbahn  Gesellschaft,  founded  June  14, 
1899,  under  a  charter  from  the  German  Government,  granted 
June  1,  1899 ;  and  which  had  made  an  agreement  with  the  Gover- 
nor of  Shantung,  March  21,  1900,  covering  the  detail  regulations 
relative  to  the  construction  and  working  of  this  line.  It  was 
opened  to  traffic  in  June,  1904. 

The  Concession  to  develop  the  mining  properties  as  granted 
by  the  Convention  of  March  6,  1898,  was  taken  by  the  Schan- 
tung Bergbau  Gesellschaft,  a  company  which  was  formed  October 
10,  1899,  under  a  charter  from  the  German  Government  dated 
June  1,  1899.  The  properties  developed  or  in  process  of  develop- 
ment by  this  company  were  the  Fangtze  and  Hungshan  Colleries 
and  the  iron  mines  near  Chinglinchen. 

By  an  agreement  of  February  5,  1913,  the  Schantung  Bergbau 
Gesellschaft  transferred  all  its  rights  and  liabilities  to  the  Schan- 
tung Eisenbahn  Gesellschaft,  which  thereupon  became  the  owner 
of  the  mining  properties  under  consideration  as  well  as  the  rail- 
way. 

4.  The  right  of  protection  of  the  Tsingtao-Chinan  Railway 
belonged  to  China.  Article  16  of  the  Railway  regulations 
made  by  agreement  of  March  21,  1900,  provided: 

"If  troops  are  needed,  outside  the  100  li  (50  kilometer)  zone, 
they  shall  be  despatched  by  the  Governor  of  the  Province  of 
Shantung.  No  foreign  troops  may  be  employed  for  this  pur- 
pose. ' ' 

Article  26  of  the  same  agreement  provided : 

"Should  the  Railway  Company  apply  for  soldiers  to  protect 
the  preparatory  work,  the  construction  or  the  traffic  of  the  rail- 
way, the  Governor  of  the  Province  of  Shantung  shall  at  once  con- 
sider the  circumstances  and  comply  with  such  application." 

As  regards  the  protection  of  the  mining  properties  belonging 
to  the  Shantung  Mining  Company,  Article  10  of  the  Mining 
Regulations  made  by  agreement  of  March  21,  1900,  provided : 

' '  If  the  Company,  in  course  of  prospecting  or  operating  mines, 
or  in  course  of  building  mining  plants,  should  request  the  Gov- 
ernor of  Shantung  to  despatch  troops  for  protection  outside  the 
100  li  (50  kilometer)  zone,  he  shall,  on  the  receipt  of  such  a 
petition  and  after  considering  the  circumstances,  forthwith 


APPENDICES  325 

comply  with  the  request,  and  despatch  an  adequate  body  of 
troops  for  the  purpose.  As  regards  the  amount  of  contribution 
which  the  Company  shall  pay  to  these  guards,  the  matter  shall 
be  subsequently  negotiated.  But  the  Company  shall  not  apply 
for  foreign  troops." 

In  1900  German  troops  were  sent  to  and  remained  in  Kaomi 
and  Kiaochow,  which  are  inside  the  50  kilometer  zone,  but  out- 
side of  the  leased  territory.  Pursuant  to  a  convention  concluded 
November  28,  1905,  between  the  Chinese  Governor  of  Shantung 
Province  and  the  German  Governor  of  Tsingtao,  Germany,  how- 
ever, withdrew  the  troops  to  Tsingtao  and  recognized  China's 
right  of  policing  that  section  of  the  railway  which  lay  within  the 
50  kilometer  zone  as  well  as  the  remaining  portion  of  the  line 
westward  and  enforcing  therein  the  Chinese  police  regulations  in 
force  in  other  parts  of  Shantung  Province.  A  Chinese  police 
station  was  forthwith  established  at  Kiaochow  and  the  policing 
work  of  the  section  within  the  zone  was  duly  taken  over  by 
China. 

5.  Besides,  Germany  possessed  certain  railway  loan  options 
in  respect  of  Shantung  Province.  By  an  exchange  of  Notes  of 
December  31,  1913,  China  granted  Germany  an  option  to  finance 
and  construct  and  supply  materials  for  two  lines  of  railway,  one 
from  Kaomi  to  a  point  on  the  Tientsin-Pukow  line,  tentatively 
fixed  at  Hanchuan,  and  the  other  from  Chinan  to  a  point  on  the 
Peking-Hankow  line  between  Shunteh  and  Sinhsiang;  while 
Germany,  on  her  part,  relinquished  her  options  in  respect  of 
Tehchow-Chenting  line  and  the  Yenchow-Kaifeng  line,  as  well  as 
the  Concession  granted  in  the  Convention  of  March  6,  1898,  to 
build  a  line  through  the  Southern  part  of  Shantung  Province; 
and  also  agreed  to  ratify  the  Mining  Areas  Delimitation  Agree- 
ment of  July  24,  1911,  concluded  between  the  Governor  of  Shan- 
tung Province  and  the  Mining  Company.  Subsequently  by  an 
exchange  of  notes  of  June  10,  1914,  Germany  obtained  a  loan 
option  on  any  westward  extension  of  the  Chinan-Shunteh  line, 
on  the  Chefoo-Weihsien  line  and  the  Tsining-Kaifeng  line. 

Under  the  Mining  Areas  Delimitation  Agreement  of  July  24, 
1911,  mentioned  above,  Germany's  mining  rights  in  Shantung 
Province,  which,  according  to  the  Convention  of  March  6,  1898, 
extended  15  kilometers  or  10  miles  on  each  side  of  the  railways 
then  to  be  built  in  the  Province,  were  greatly  curtailed.  The 
Shantung  Mining  Company  relinquished  under  this  agreement 
all  her  mining  rights  except  the  Tsechuan  and  Fangtze  Collieries 


326  APPENDICES 

and  Chinglingchen  iron  mine.  The  areas  of  these  three  mining 
properties  retained  were  surveyed  and  defined  with  an  option 
for  German  subjects  to  supply  capital,  engineers,  materials  and 
machinery,  if  needed  for  mining  operations  within  the  areas 
relinquished. 

B — Origin  and  Extent  of  Japan's  Military  Occupation 
of  Shantung 

1.  Soon  after  the  outbreak  of  the  European  War,  China  pro- 
claimed her  neutrality  by  a  Presidential  Mandate  of  August  6, 
1914.     Two  weeks  later  the  Japanese  Minister  informed  the 
Chinese  Government  that  Japan  had  delivered  an  ultimatum  to 
Germany  on  August  15,  advising  the  immediate  withdrawal  of 
German  men-of-war  and  armed  vessels  of  all  kinds  from  Chinese 
and  Japanese  waters  and  the  delivery  at  a  date  not  later  than 
September  15  of  the  entire  leased  territory  of  Kiaochow  to  the 
Japanese  authorities,  with  a  view  to  the  eventual  restoration  of 
the  same  to  China ;  and  asking  for  an  unconditional  acceptance 
of  the  advice  by  noon  on  August  23,  1914.    The  purpose  of  this 
step,  as  stated  in  the  preamble  of  the  ultimatum,  was  "to  see 
that  causes  of  disturbance  of  peace  in  the  Far  East  are  removed 
and  to  take  steps  to  protect  the  general  interest  of  the  Anglo- 
Japanese   Alliance. "     Though   not   previously    consulted,    the 
Chinese  Government  intimated  their  desire  to  join  in  the  con- 
templated course  of  action  in  regard  to  the  leased  territory  of 
Kiaochow,  and  ceased  to  urge  it  only  when  they  found  it  was 
not  favorably  entertained.    Japan,  failing  to  receive  a  reply  to 
her  ultimatum,  declared  war  on  Germany,  August  23,  1914. 

2.  The  first  contingent  of  Japanese  troops,   20,000   strong, 
despatched  to  attack  Tsingtao,  unexpectedly  selected  for  the  pur- 
pose of  disembarkation,  the  port  of  Lungkow,  which  is  situated 
on  the  northern  coast  of  Shantung  Province,  150  miles  north 
of  Tsingtao.    They  landed  on  September  3.    In  proceeding  across 
the  entire  breadth  of  the  peninsula  to  their  destination,  Kiao- 
chow, which  their  advance  guards  reached  on  September  14, 
they  deemed  it  necessary  to  occupy  cities  and  towns  en  route, 
to  seize  the  Chinese  postal  and  telegraph  offices,  and  to  subject 
the  populace  to  suffering  and  hardships,  including  requisitions 
of  labour  and  supplies.     The  British  force  which  co-operated 
with  the  Japanese  troops  in  the  attack,  was  landed  on  the  other 
hand  at  Laoshan  Bay,  inside  the  German  leased  territory,  on  Sep- 


APPENDICES  327 

tember  23 ;  and  owing  to  the  fact  that  the  distance  which  sepa- 
rated Laoshan  Bay  from  Tsingtao  was  much  shorter  and  the 
natural  obstacles  fewer  than  what  the  Japanese  troops  had  to 
encounter  in  their  preliminary  advances,  it  arrived  on  the  scene 
in  time  to  participate  in  the  first  engagement  with  the  Germans. 

3.  In  order  to  better  safeguard  the  neutrality  of  her  territory, 
China,  when  confronted  with  the  presence  of  Japanese  troops 
in  Lungkow,  was  constrained  to  declare,  on  September  3,  that 
the  Chinese  Government,  following  the  precedent  established  in 
the  Russo-Japanese  War,  would  not  accept  the  responsibility 
for  the  passing  of  belligerent  troops  or  any  war  operations  at 
Lungkow,  Laichow  and  the  adjacent  districts  of  Kiaochow  Bay, 
and  reconfirmed  the  strict  neutrality   of  the   other   parts   of 
China.     The  Government  of  the  Powers  were  informed  of  this 
declaration  by  a  note  of  the  same  date.    At  the  same  time  an 
understanding  was  reached  with  the  Japanese  Government  that 
the  special  military  zone  so  declared  extended  from  the  sea  to 
a  point  on  the  railway  east  of  the  Weihsien  railway  station, 
approximately  100  miles  west  of  Tsingtao,  and  that  the  Japanese 
troops  should  observe  the  limits  and  not  encroach  westward. 

4.  Nevertheless,  on  September  26,  a  contingent  of  400  Jap- 
anese troops  proceeded  to  Weihsien  and  occupied  the  railway 
station.    On  October  3,  they  compelled  the  withdrawal  of  Chinese 
troops  from  the  vicinity  of  the  railway;  and  three  days  later, 
on  October  6,  they,  notwithstanding  the  protests  of  the  Chinese 
Government,  went  to  Chinan  and  occupied  all  the  three  stations 
in  the  city,  thereby  possessing  themselves  of  the  entire  line  of 
the  railway  from  Tsingtao  to  Chinan.     Japanese  troops  were 
distributed  along  the  entire  line  and  its  employees  were  gradually 
replaced  by  Japanese  subjects.     The  mining  properties  along 
the  railway  were  seized  in  the  same  period  and  their  exploitation 
resumed. 

Meanwhile  the  military  campaign  to  invest  and  capture 
Tsingtao  proceeded  until  November  7,  when  the  Germans  sur- 
rendered the  city  of  Tsingtao  to  the  Allied  expeditionary  force 
of  British  and  Japanese  troops,  who  entered  on  November  16. 
The  port  was  opened  to  trade  on  January  1,  1915. 

5.  Seeing  that  with  the  complete  surrender  of  the  Germans 
at  Tsingtao,  hostilities  had  terminated  and  the  military  measures 
of  both  belligerents  had  been  abandoned,  the  Chinese  Govern- 
ment requested  the  withdrawal  of  Japanese  troops  from  the 
interior  of  Shantung  to  Tsingtao,  the  removal  of  the  light  rail- 


328  APPENDICES 

way  from  Lungkow  to  Chantien,  and  the  taking  down  of  the 
special  telegraph  wires  attached  to  the  Chinese  telegraph  poles. 
Unable  to  persuade  the  Japanese  Government  to  accede  to  their 
request,  but  seeing  that  the  exigencies  which  had  compelled  them 
to  declare  the  special  military  zone  had  already  ceased  to  exist, 
the  Chinese  Government  revoked  their  previous  declaration  and 
duly  notified  the  British  and  Japanese  Ministers  on  January  7, 
1915,  of  the  act  of  revocation.  To  this  communication  the 
Japanese  Minister  replied  in  a  note  of  January  9,  1915,  stating 
under  instructions  from  his  Government  that  the  act  of  revoca- 
tion was  "improper,  arbitrary,  betraying  in  fact,  want  of  confi- 
dence in  international  good  faith  and  regardless  of  friendly 
relations, ' '  and  that  the  Japanese  Government  would  not  permit 
the  movements  and  actions  of  the  Japanese  troops  in  Shantung 
to  be  in  any  way  affected  by  the  action  of  the  Chinese  Govern- 
ment. 

6.  After  the  occupation  of  Tsingtao  and  the  Bay  of  Kiaochow, 
Japan  demanded  the  right  to  appoint  about  forty  Japanese  sub- 
jects to  the  staff  of  the  Chinese  Maritime  Customs  which  China 
had  established  under  the  Sino-German  agreement  of  April  17, 
1899,  as  amended  December  1,  1905.  The  Chinese  Government 
did  not  feel  justified  in  acceding  to  the  proposal  as  they  had 
reason  to  apprehend  that  its  acceptance  might  disorganize  the 
customs  administration,  and  as  when  the  Germans  were  in  con- 
trol, appointments  to  the  staff  of  the  Chinese  Customs  in  Tsingtao 
had  always  been  made  by  China.    When  negotiations  were  thus 
pending,  General  Kamio,  under  instructions,  took  possession  of 
the  Customs  offices  and  seized  the  archives  and  other  property 
of  the  Chinese  Customs. 

7.  The  Province  of  Shantung  was  in  this  situation  when  the 
Japanese  Minister  in  Peking,  to  the  dismay  of  China,  presented 
to  the  President  of  China  on  January  18,  1915,  the  now  celebrated 
Twenty-one  Demands,  divided  into  five  groups.    The  first  group 
dealt  with  the  question  of  Shantung.    Negotiations  extended  into 
May,  when  on  the  7th  of  that  month  the  Japanese  Government 
sent  an  ultimatum  to   China  demanding  a  satisfactory  reply 
within  forty-eight  hours.     At  the  same  time  reports  reached 
Peking  of  the  increase  of  Japanese  garrisons  in  Manchuria  and 
Shantung.     In   the   face   of   these   circumstances   the   Chinese 
Government  had  no  other  course  to  follow  than  to  yield  to  the 
wishes  of  Japan.     China  was  constrained  to  sign  on  May  25th, 
1915,  among  other  things,  a  treaty  in  respect  of  Shantung  Pro- 


APPENDICES  329 

vince,  accompanied  by  three  sets  of  notes.  The  Chinese  Govern- 
ment felt  compelled  to  give  their  consent,  however  unwillingly, 
only  in  order  to  maintain  the  peace  of  the  Far  East,  to  spare  the 
Chinese  people  unnecessary  suffering,  and  to  prevent  the  inter- 
ests of  friendly  Powers  in  China  from  being  imperilled  at  a 
time  when  they  were  already  engaged  in  an  unprecedented 
struggle  against  the  Central  Powers  for  the  vindication  of  right, 
liberty,  and  justice;  and  because  she  felt  confident,  moreover, 
that  the  final  settlement  of  this  question  as  of  the  other  questions 
dealt  with  in  the  agreement  made  in  consequence  of  the  Twenty- 
one  Demands,  could  be  effected  only  at  the  Peace  Conference. 

8.  Under  an  Imperial  Ordinance,  No.  175,  of  October  1,  1917, 
the  Japanese  Government  established  a  Civil  Administration  at 
Tsingtao  with  branches  at  Fangtze,  Chantien  and  Chinan,  all  of 
which  three  cities  are  situated  along  the  railway  outside  of  the 
leased  territory  and  of  the  50  kilometer  zone.  Fangtze,  the  nearest 
of  the  three  above-mentioned  cities  to  Tsingtao,  is  separated  from 
it  approximately  by  a  distance  of  90  miles.    The  Fangtze  branch 
of  the  Japanese  Civil  Administration  has  even  asserted  jurisdic- 
tion in  law  suits  between  Chinese  and  has  levied  taxes  on  them. 
The  Kiaochow-Chinan  Railway  and  the  mines  were  also  placed 
under  the  control  of  a  railways  department  of  the  Civil  Admin- 
istration. 

9.  Public  opinion  in  China,  especially  in  Shantung,  became 
alarmed  at  the  continued  presence  of  the  Japanese  troops  along 
the  railway,  extending  as  it  does,  into  the  heart  of  Shantung, 
and  at  the  establishment  of  these  Japanese  bureaux  of  Civil 
Administration  aiming,  in  view  of  the  Chinese  people,  at  the 
permanent   occupation  of  that   Province — one  to   which  their 
hearts  are  profoundly  attached.     They  brought  such  pressure 
to  bear  upon  the  Chinese  Government  that  the  latter  deemed 
it  advisable  to  find  some  means  of  appeasing  their  minds  until 
the  war  was  terminated,  and  until  the  Peace  Conference  had 
met  to  settle  all  questions  affecting  the  future  peace  of  the 
world.    Negotiations  were  opened  with  the  Japanese  Government 
and  a  preliminary  agreement  was  concluded  with  them  on  Sep- 
tember 24,  1918,  making  a  loan  for  the  construction  of  two 
railways   to    connect   the    Tsingtao-Chinan    Railway    with   the 
Tientsin-Pukow-Nanking-Shanghai    line    at    Hsuchow    and   the 
Peking-Hankow  line.     In  consideration  thereof,  the  Japanese 
Government,  in  an  exchange  of  Notes,  also  dated  September  24, 
1918,  agreed,  among  other  things,  to  withdraw  the  Japanese 


330  APPENDICES 

troops  along  the  Tsingtao-Chinan  Railway,  and  to  abolish  the 
existing  Japanese  Civil  Administration  bureaux  in  Shantung. 
An  advance  of  twenty  million  yen  was  made,  but  the  final 
agreement  has  not  to  date  been  signed. 


C — Why  China  Claims  Restitution 

1.  The  leased  territory  of  Kiaochow,  including  the  bay  and 
islands  therein,  is  and  has  always  been  an  integral  part  of  Chinese 
territory.    The  nationality  has  never  been  in  question.     On  the 
contrary,  the  sovereignty  of  China  over  the  territory  is  reserved 
in  the  Lease  Convention.     Besides,  the  lease  to  Germany  in 
1898  originated  in  an  act  of  aggression  on  her  part,  and  was 
granted  by  China  only  under  coercion  in  circumstances  already 
described  in  Part  A  of  this  memorandum.     The  railway  and 
mining  rights  which  Germany  possessed  in  Shantung  Province 
before  the  war  were  part  of  the  same  grant.     Restitution  to 
China  of  these  rights  and  the  leased  territory  would,  therefore, 
be  a  mere  act  of  justice  to  her  in  consonance  with  the  accepted 
principle  of  territorial  integrity  and  of  nationality,  while  return 
of  the  same  to  Germany,  or  their  transfer  to  any  third  Power, 
would  be  to  deny  justice  to  China. 

2.  The  Province  of  Shantung,  of  which  the  leased  territory  of 
Kiaochow  is  a  part,  and  in  which  the  German-built  Railway,  now 
in  Japanese  occupation,  stretches  from  Tsingtao  to  the  interior 
over  a  distance  of  254  miles,  contains  a  population  of  38  million 
inhabitants,  who  are  proud  and  intensely  patriotic.     They  are 
part  and  parcel  of  the  homogeneous  Chinese  race.    They  speak 
and  write  the  same  Chinese  language,  and  believe  in  the  same 
Confucian  religion  as  the  Chinese  people  in  the  other  Provinces 
of  China.     They  meet  every  requirement  of  the  principle  of 
nationality;  they  are  indeed  the  very  embodiment  of  the  prin- 
ciple itself.    Nor  is  there  any  doubt  of  their  earnest  desire  to 
free  their  own  Province  from  the  menace  of  Germany,  or  of 
any  other  Power. 

3.  Historically,   Shantung  is  the  birthplace  of   China's  two 
greatest  sages,  Confucius  and  Mencius,  and  the  cradle  of  Chinese 
civilization.    It  is,  in  fact,  the  Holy  Land  for  the  Chinese  people. 
Every  year  thousands  of  Chinese  scholars,  pilgrims  of  Confucian- 
ism, travel  to  Chuf  ou,  in  the  heart  of  the  Province,  to  do  homage 
to  the  reverend  memory  of  the  illustrious  sages.    The  eyes  of  the 
entire  Chinese  people  are  focussed  on  this  Province,  which  has 


APPENDICES  331 

always  played  and  still  plays  a  very  important  part  in  the 
development  of  China. 

4.  The  dense  population  in  Shantung  Province  creates  a  keen 
economic  competition.    To  earn  a  livelihood  is  a  difficult  thing 
for  38,347,000  inhabitants  limited  to  the  resources  of  agriculture 
in  a  Province  of  35,976  square  miles.    The  population  is  almost 
equal  to  that  of  France,  with  a  territory,  however,  only  one-quar- 
ter as  large.    It  is  evident,  therefore,  that  there  is  no  room  for 
surplus  population  of  any  foreign  Power.     The  creation  of  a 
special  sphere  of  influence  or  special  interests  therein  could  lead 
only  to  the  unjustified  exploitation  of  the  Chinese  inhabitants. 

5.  Besides,  Shantung  Province  possesses  all  the  elements  for 
the  economic  domination  of  North  China.    Its  larger  population 
provides  a  growing  market  for  foreign  merchandise,  while  its 
rich  mineral  resources  and  abundance  of  raw  materials  are  con- 
ducive to  the  development  of  industries.    More  important  than 
these,  however,  is  the  fact  that  the  Bay  of  Kiaochow  is  destined 
to  be  at  once  the  chief  outlet  for  the  products  of  North  China 
and  the  principal  port  of  entrance  for  foreign  goods  destined 
for  the  same  regions.    Kiaochow  had  indeed  been  the  principal 
port  of  Shantung  for  many  centuries.    Thither  the  products  of 
the  Province  were  brought  down  in  a  canal  built  in  the  year 
1200  and  connected  with  Weihsien,  the  most  important  market 
of  the  interior.    Though  Kiaochow  itself  has  ceased  to  be  a  mari- 
time town  after  the  torrents  which  emptied  into  the  bay  had 
gradually  filled  the  northern  part,  yet  Shantung  now  possesses 
the  port  of  Tsingtao,  which  occupies  a  point  on  the  coast  cor- 
responding to  the  port  of  Kiaochow.    Reinforced  by  new  arteries 
of    trade,    including    the    Tsingtao-Kiaochow-Weihsien-Chinan 
Railway,  which  is  connected  at  the  last-mentioned  city  with  the 
Peking-Tientsin-Nanking-Shanghai  system  of  railways,  and  being 
situated  on  the  brink  of  the  Kiaochow  Bay  which,  unlike  the 
Peiho  of  Tientsin,  never  freezes,  but  is  well  sheltered  from  the 
winter  winds,  the  new  emporium  is  in  a  position  to  tap  the 
trade  of  the  whole  of  North  China.    Nowhere,  therefore,  is  the 
building  up  of  a  foreign  sphere  of  influence  more  dangerous  to 
international  trade  and  industries;  nowhere  can  the  open  door 
policy  be  upheld  with  greater  advantage  to  the  common  interests 
of  all  foreign  Powers,  than  in  the  Province  of  Shantung;  and 
no  country  is  in  a  better  position  to  uphold  it  than  China  her- 
self. 

6.  Strategically,  the  Bay  of  Kiaochow  commands  one  of  the 


332  APPENDICES 

gateways  of  North  China.  By  the  existence  of  the  Tsingtao-Chi- 
nan  Railway,  which  is  connected  at  the  latter  mentioned  terminal 
with  the  railway  of  Tientsin  and  Peking,  it  controls,  too,  one  of 
the  quickest  approaches  from  the  sea  to  the  capital  of  the  Chinese 
Republic,  one  other  being  the  line  of  railway  commencing  from 
Port  Arthur  and  Dalny  to  Mukden  and  thence  to  Peking.  In 
the  interest  of  her  national  defense  and  security,  no  less  than  on 
other  grounds,  the  Chinese  Government  have  wished  to  terminate 
the  German  occupation  of  Tsingtao  and  Kiaochow  Bay,  and 
now  that,  thanks  to  the  Anglo-Japanese  Allied  force,  Germany 
has  been  expelled  therefrom,  China  earnestly  desires  to  retain 
these  strategically  vital  points  in  her  own  hands. 

7.  Examined  from  various  points  of  view,  the  question  of  the 
leased  territory  of  Kiaochow  with  its  appurtenant  rights  is 
susceptible  of  only  one  satisfactory  solution.  By  restoring  it 
to  China,  together  with  the  railway  and  other  rights,  the  Peace 
Conference  would  be  not  only  redressing  a  wrong  which  has  been 
wantonly  committed  by  Germany,  but  also  serving  the  common 
interests  of  all  nations  in  the  Far  East.  The  people  of  Shan- 
tung Province  are  a  sensitive  people,  they  resent  any  foreign 
penetration  looking  to  political  or  economic  domination  of  their 
Province,  and  they  do  not  always  hesitate  to  manifest  their 
resentment.  They  resented  bitterly  the  German  occupation  of 
the  Kiaochow  Bay  and  the  German  penetration  into  the  Province 
of  Shantung.  They  resent  even  the  present  temporary  occupa- 
tion of  the  leased  territory  and  the  railway  of  a  friendly  asso- 
ciate and  partner  in  the  war,  as  evidenced  in  the  protests  of 
the  Provisional  Legislature,  of  the  gentry  and  of  the  Chamber 
of  Commerce.  And  their  feeling  is  shared  by  the  people  in 
the  other  Provinces  of  China.'  The  difficulty  with  which  the 
Chinese  Government  have  restrained  them  from  manifesting 
their  opposition  in  a  more  energetic  way  than  making  protests 
is  indicative  of  their  profound  feelings  on  the  question.  It  is 
felt  that  non-restitution  might  give  cause  to  friction  not  only 
between  China  and  any  foreign  Power  which  was  to  hold  the 
leased  territory,  the  railway  and  other  rights  of  Germans,  but 
more  particularly  between  the  people  of  Shantung  and  the 
nationals  of  such  a  Power.  It  would  be  difficult  to  reconcile 
it  with  the  declared  purpose  of  the  attack  on  Tsingtao,  which 
was  "to  secure  a  firm  and  enduring  peace  in  Eastern  Asia"; 
nor  would  it  be  consonant  with  the  objects  of  the  alliance  between 
Japan  and  Great  Britain,  one  of  which  was  stated  to  be  "the 


APPENDICES  333 

preservation  of  the  common  interest  of  all  Powers  in  China  by 
insuring  the  independence  and  integrity  of  the  Chinese  Empire, 
and  the  principle  of  equal  opportunities  for  the  commerce  and 
industry  of  all  nations  in  China." 

D — Why  Restitution  Should  Be  Direct 

In  dwelling  upon  the  ground  justifying  complete  restitution  to 
China  of  the  leased  territory  of  Kiaochow,  the  Tsingtao-Chinan 
Railway  and  other  appurtenant  rights,  the  Chinese  Govern- 
ment is  far  from  suggesting,  still  less  from  apprehending,  that 
Japan,  in  claiming  from  Germany  the  unconditional  surrender 
of  the  leasehold  and  the  railway  rights,  would  not  return  the 
same  to  China  after  she  had  obtained  them.  On  the  contrary, 
China  has  every  confidence  in  Japan's  assurances  to  her.  If 
emphasis  has  been  laid  on  the  point  of  complete  restoration  to 
China,  it  has  been  done  only  for  the  purpose  of  focusing  attention 
on  the  fundamental  justice  of  such  a  step. 

1.  But  of  this  restoration  there  are  two  possible  modes,  direct 
restitution  to  China,  and  indirect  restitution  through  Japan; 
and  of  the  two,  the  Chinese  Government  prefers  the  first  course, 
because,  among  other  reasons,  it  is  a  simpler  procedure  and  less 
likely  to  give  rise  to  complications.    It  is  preferable  to  take  one 
step  than  two,  if  it  leads  to  the  same  point  of  destination.    More- 
over, the  fact  that  Chinan,  participating  in  the  glorious  victory 
of  the  Allies  and  Associates,  received  direct  from  Germany  the 
restitution  of  Tsingtao  and  other  rights  of  Shantung,  will  com- 
port to  her  national  dignity  and  serve  to  illustrate  further  the 
principles  of  right  and  justice  for  which  the  Allies  and  Asso- 
ciates have  fought  the  common  enemy. 

2.  In  asking  for  direct  restitution  the  Chinese  Government 
is  not  unaware  of  the  sacrifices  which  Japan  has  made  in  dis- 
lodging Germany  from  Tsingtao,  nor  of  the  losses  she  has  sus- 
tained in  life  and  treasure.    For  this  act  of  neighbourly  service 
so  nobly  performed  by  her  brave  army  and  navy,  the  Govern- 
ment and  people  of  China  feel  sincerely  grateful.     They  feel 
indebted  also  to  Great  Britain  for  having  co-operated  in  this  task 
at  a  time  of  great  peril  to  herself  in  Europe.    Nor  are  they  for- 
getful of  their  indebtedness  to  the  troops  of  the  other  Allied 
and  Associated  Powers  who  held  in  check  an  enemy  who  might 
otherwise   have   easily  sent   reinforcements   to   the   Far   East, 
thereby  prolonging  hostilities  there.     China  appreciates  those 


334  APPENDICES 

services  all  the  more  keenly  because  her  own  people  in  Shan- 
tung have  suffered  and  been  obliged  to  undergo  sacrifices  in 
connection  with  the  military  operations  of  the  Allied  forces 
for  the  capture  of  Tsingtao.  But  grateful  as  China  is,  she  does 
not  feel  justified  in  admitting  that  her  territorial  rights  could 
be  affected  ipso  facto  by  a  war  between  other  Powers,  she  not 
having  then  entered  the  war.  Furthermore,  the  sacrifices  of 
Japan  could  receive  no  greater  or  more  substantial  compensa- 
tion than  in  the  full  attainment  of  her  declared  object  in  the 
war,  namely,  the  elimination  of  German  menace  to  the  peace  of 
the  Far  East. 

3.  Nor  is  the  Chinese  Government  oblivious  of  the  fact  that 
Japan  has  been  for  four  years  a  military  occupant  of  the  leased 
territory,  the  railway  and  other  rights.     But  military  occupa- 
tion pending  the  termination  of  a  war,  it  is  submitted,  does  not 
of  itself  give  title  to  the  territory  or  property  occupied.    It  is 
in  any  case  only  temporary  and  subject  to  confirmation  or  termi- 
nation at  the  Peace  Conference,  where  the  general  interests  of 
all  the  Allied  and  Associated  Powers  in  the  war  are  to  be  con- 
sidered.   In  the  present  case,  Japan 's  military  occupation  of  the 
leased  territory  and  the  railway  has,  from  the  day  of  China's 
Declaration  of  War  on  Germany  and  Austria-Hungary,  been 
against  the  rights  of  China,  as  Associate  and  partner  in  the  war, 
and,  in  the  case  of  the  railway,  has  been  against  her  protest 
from  the  very  beginning. 

4.  It  is  true  that  on  May  25, 1915,  China  concluded  with  Japan 
a  treaty  in  relation  to  Shantung  Province,  the  first  article  of 
which  reads: 

"The  Chinese  Government  agrees  to  give  full  assent  to  all 
matters  upon  which  the  Japanese  Government  may  hereafter 
agree  with  the  German  Government  relating  to  the  disposition  of 
all  rights,  interests  and  concessions  which  Germany,  by  virtue  of 
treaties  or  otherwise,  possesses  in  relation  to  the  Province  of 
Shantung. ' ' 

It  is  to  be  recalled,  however,  that  this  treaty,  together  with 
another  in  relation  to  Manchuria  and  Eastern  Inner  Mongolia, 
and  a  number  of  exchanges  of  notes,  was  the  outcome  of  the 
Twenty-one  Demands  imposed  on  China  by  Japan  on  January 
18, 1915,  without  the  least  provocation.  China  reluctantly  agreed 
to  it  only  after  having  received  an  ultimatum  from  Japan  calling 
for  a  satisfactory  reply  within  forty-eight  hours. 

Apart  from  the  circumstances  under  which  the  treaty  was 


APPENDICES  335 

made — circumstances  which  were  most  painful  to  China — it 
was  in  the  view  of  the  Chinese  Government  at  best  merely  a 
temporary  arrangement  subject  to  final  revision  by  the  Peace 
Conference,  because  it  dealt  primarily  with  a  question  which 
had  arisen  from  the  war,  and  which,  therefore,  could  not  be  satis- 
factorily settled  except  at  the  final  Peace  Conference.  The  same 
view  applies  to  the  agreement  made  more  recently  in  respect  of 
the  Kiaochow-Chinan  Railway  and  other  railway  concessions 
formerly  granted  to  Germany. 

Moreover,  careful  examination  of  the  article  above  mentioned 
will  reveal  the  fact  that  it  does  not  confer  on  Japan  any  claim 
to  the  leased  territory,  the  railway  or  the  other  German  rights 
in  Shantung ;  it  merely  gives  her  an  assurance  of  China 's  assent 
to  all  matters  relating  to  the  disposition  of  Germany's  rights, 
interests  and  concessions  which  may  eventually  be  agreed  on 
between  Japan  and  Germany.  This  assurance  was  clearly  sub- 
ject, however,  to  the  implied  condition  that  China  remained 
neutral  throughout  the  war;  and  therefore,  would  be  unable  to 
participate  in  the  final  Peace  Conference.  Any  other  interpreta- 
tion of  this  article  would  have  to  attribute  to  Japan  an  intention 
which  she  could  not  have  entertained  consistently  with  her 
express  declaration,  as,  for  instance,  in  her  treaty  of  alliance 
with  Great  Britain,  of  her  desire  to  insure,  among  other  things, 
the  independence  of  China.  For  to  have  denied  China  the  right 
to  declare  war,  to  sit  in  the  Peace  Conference  and  defend  her 
own  rights  and  interests  would  have  meant  the  denial  to  her  of  an 
essential  right  accruing  from  her  political  independence.  China's 
entry  into  the  war  so  vitally  changed  the  situation  contemplated 
in  the  treaty  that  on  the  principle  of  rebus  sic  stantibus,  it  ceased 
to  be  applicable. 

5.  Furthermore,  since  China  had  expressly  stated  in  her 
Declaration  of  War  that  all  treaties,  agreements  and  conventions, 
heretofore  concluded  between  China  and  Germany,  were  abro- 
gated by  the  existence  of  the  state  of  war  between  them,  the  Lease 
Convention  of  March  6,  1898,  under  which  Germany  had  held 
the  leased  territory,  the  railway  and  other  rights,  was  necessarily 
included  in  the  act  of  abrogation ;  and  all  the  leasehold  rights  of 
Germany  might  be  therefore  considered  to  have  reverted  in  law 
to  the  territorial  sovereign  and  original  lessor  state.  In  other 
words,  Germany  has  lost  her  leasehold  rights  and  now  possesses 
no  rights  in  relation  to  Shantung  which  she  can  surrender  to 
another  Power.  If  it  be  contended  that  the  war  had  not  con- 


336  APPENDICES 

clusively  abrogated  the  Lease  Convention,  then  Germany,  because 
of  an  express  prohibition  in  the  Convention,  would  be  no  more 
competent  to  transfer  the  leased  territory  to  a  third  Power. 
As  regards  the  railway,  the  right  is  expressly  reserved  to  China 
in  the  Railway  Agreement  of  March  21,  1900,  to  buy  the  line 
back,  implying  a  prohibition  against  transfer  to  a  third  Power. 
In  view  of  the  foregoing  considerations,  the  Chinese  Govern- 
ment earnestly  trust  that  the  Peace  Conference  will  find  their 
claim  for  direct  restitution  to  China  of  the  leased  territory  of 
Kiaochow,  the  Tsingtao-Chinan  Railway,  and  other  German 
rights  in  relation  to  Shantung  Province,  as  one  well-founded 
in  law  and  justice.  Full  recognition  of  this  claim,  they  believe, 
will  cause  the  Government  and  people  of  China  to  feel  deeply 
indebted  to  the  Powers,  especially  to  Japan,  for  their  sense  of 
justice  and  their  spirit  of  altruism.  It  will  serve  at  once  to 
strengthen  the  political  independence  and  territorial  integrity  of 
China,  which  the  Chinese  Government  believe  Japan  and  other 
friendly  Powers  are  sincerely  desirous  of  upholding,  and  to 
secure,  by  a  new  guarantee,  the  permanent  peace  of  the  Far 
East. 


APPENDIX  K 

LETTER  OF  PROTEST  BY  GENERAL  BLISS 

"  Hotel  de  Crillon,  Paris. 

"  April  29,  1919. 
"My  dear  Mr.  President: 

"Last  Saturday  morning  you  told  the  American  Delegation 
that  you  desired  suggestions,  although  not  at  that  moment,  in 
regard  to  the  pending  matter  of  certain  conflicting  claims 
between  Japan  and  China  centering  about  the  alleged  German 
rights.  My  principal  interest  in  the  matter  is  with  sole  reference 
to  the  question  of  the  moral  right  or  wrong  involved.  From  this 
point  of  view  I  discussed  the  matter  this  morning  with  Mr. 
Lansing  and  Mr.  White.  They  concurred  with  me  and  requested 
me  to  draft  a  hasty  note  to  you  on  the  subject. 

"Since  your  conference  with  us  last  Saturday,  I  have  asked 
myself  three  or  four  Socratic  questions  the  answers  to  which 
make  me,  personally,  quite  sure  on  which  side  the  moral  right 
lies. 


APPENDICES  337 

"First.  Japan  bases  certain  of  her  claims  on  the  right 
acquired  by  conquest.  I  asked  myself  the  following  questions: 
Suppose  Japan  had  not  succeeded  in  her  efforts  to  force  the 
capitulation  of  the  Germans  at  Tsing-Tau;  suppose  that  the 
armistice  of  November  llth  had  found  her  still  fighting  the  Ger- 
mans at  that  place,  just  as  the  armistice  found  the  English  still 
fighting  the  Germans  in  South-East  Africa.  We  would  then 
oblige  Germany  to  dispose  of  her  claims  in  China  by  a  clause 
in  the  Treaty  of  Peace.  Would  it  occur  to  any  one  that  as  a 
matter  of  right,  we  should  force  Germany  to  cede  her  claims 
to  Japan  rather  than  to  China?  It  seems  to  me  that  it  would 
occur  to  every  American  that  we  would  have  the  opportunity 
that  we  have  long  desired  to  force  Germany  to  correct,  in  favour 
of  China,  the  great  wrong  which  she  began  to  do  to  the  latter 
in  1898.  What  moral  right  has  Japan  acquired  by  her  conquest 
of  Shantung  assisted  by  the  British?  If  Great  Britain  and 
Japan  secured  no  moral  right  to  sovereignty  over  various  savages 
inhabiting  islands  in  the  Pacific  Ocean,  but,  on  the  other  hand, 
we  held  that  these  peoples  shall  be  governed  by  mandates  under 
the  League  of  Nations,  what  moral  right  has  Japan  acquired 
to  the  suzerainty  (which  she  would  undoubtedly  eventually  have) 
over  30,000,000  Chinese  in  the  sacred  province  of  Shantung? 

"Second.  Japan  must  base  her  claims  either  on  the  Con- 
vention with  China  or  on  the  right  of  conquest,  or  on  both.  Let 
us  consider  her  moral  right  under  either  of  these  points. 

"  (a)  If  the  United  States  has  not  before  this  recognised 
the  validity  of  the  rights  claimed  by  Japan  under  her  Con- 
vention with  China,  what  has  happened  since  the  Armis- 
tice that  would  justify  us  in  recognising  their  validity 
now? 

"  (b)  If  Germany  had  possessed  territory,  in  full  sov- 
ereignty, on  the  east  coast  of  Asia,  a  right  to  this  territory, 
under  international  law,  could  have  been  obtained  by  con- 
quest.    But  Germany  possessed  no  such  territory.     What 
then  was  left  for  Japan  to  acquire  by  conquest?     Appar- 
ently nothing  but  a  lease  extorted  under  compulsion  from 
China  by  Germany.     I  understand  that  international  law- 
yers hold  that  such  a  lease,  or  the  rights  acquired,  justly 
or  unjustly,  under  it,  cannot  be  acquired  by  conquest. 
"Third.     Suppose  Germany  says  to  us,  'We  will  cede  our 
lease  and  all  rights  under  it,  but  we  will  cede  them  back  to 
China. '    Will  we  recognise  the  justice  of  Japan 's  claims  to  such 


338  APPENDICES 

an  extent  that  we  will  threaten  Germany  with  further  war 
unless  she  cedes  these  rights  to  Japan  rather  than  to  China? 

"  Again,  suppose  that  Germany,  in  her  hopelessness  of  resist- 
ance to  our  demands,  should  sign  without  question  a  clause 
ceding  these  rights  to  Japan,  even  though  we  know  that  this  is 
so  wrong  that  we  would  not  fight  in  order  to  compel  Germany 
to  do  it,  what  moral  justification  would  we  have  in  making  Ger- 
many do  this? 

"Fourth.  Stripped  of  all  words  that  befog  the  issue,  would 
we  not,  under  the  guise  of  making  a  treaty  with  Germany,  really 
be  making  a  treaty  with  Japan  by  which  we  compel  one  of  our 
Allies  (China)  to  cede  against  her  will  these  things  to  Japan? 
Would  not  this  action  be  really  more  unjustifiable  than  the  one 
which  you  have  refused  to  be  a  party  to  on  the  Dalmatian 
Coast?  Because,  in  the  latter  case,  the  territory  in  dispute  did 
not  belong  to  one  of  the  Allies,  but  to  one  of  the  Central  Powers ; 
the  question  in  Dalmatia  is  as  to  which  of  two  friendly  powers 
we  shall  give  territory  taken  from  an  enemy  power;  in  China 
the  question  is,  shall  we  take  certain  claimed  rights  from  one 
friendly  power  in  order  to  give  them  to  another  friendly  power  ? 

"It  would  seem  to  be  advisable  to  call  particular  attention 
to  what  the  Japanese  mean  when  they  say  that  they  will  return 
Kiaochow  to  China.  They  do  not  offer  to  return  the  railway, 
the  mines  or  the  port,  i.e.,  Tsingtao.  The  leased  territory 
included  a  portion  of  land  on  the  north-east  side  of  the  entrance 
of  the  Bay  and  another  on  the  south-west  and  some  islands. 
It  is  a  small  territory.  The  50  Kilometer  Zone  was  not  included. 
That  was  a  limitation  put  upon  the  movement  of  German  troops. 
They  could  not  go  beyond  the  boundary  of  the  zone.  Within 
the  zone  China  enjoyed  all  rights  of  sovereignty  and  admin- 
istration. 

"Japan's  proposal  to  abandon  the  zone  is  somewhat  of  an 
impertinence,  since  she  has  violated  it  ever  since  she  took  pos- 
session. She  kept  troops  all  along  the  railway  line  until  recently 
and  insists  on  maintaining  in  the  future  a  guard  at  Tsinan, 
254  miles  away.  The  zone  would  restrict  her  military  move- 
ments, consequently  she  gives  it  up. 

"The  proposals  she  makes  are  (1)  to  open  the  whole  bay.  It 
is  from  15  to  20  miles  from  the  entrance  to  the  northern  shore 
of  the  bay.  (2)  To  have  a  Japanese  exclusive  concession  at  a 
place  to  be  designated  by  her,  i.e.,  she  can  take  just  as  much 
as  she  likes  of  the  territory  around  the  bay.  It  may  be  as  large 


APPENDICES  ,  339 

as  the  present  leased  territory,  but  more  likely  it  will  include 
only  the  best  part  of  Tsingtao.  What  then  does  she  give  up? 
Nothing  but  such  parts  of  the  leased  territory  as  are  of  no  value. 

"The  operation  then  would  amount  chiefly  to  an  exchange  of 
two  pieces  of  paper — one  cancelling  the  lease  for  78  years,  the 
other  granting  a  more  valuable  concession  which  would  amount 
to  a  permanent  title  to  the  port.  Why  take  two  years  to  go 
through  this  operation? 

"If  it  be  right  for  a  policeman,  who  recovers  your  purse,  to 
keep  the  contents  and  claim  that  he  has  fulfilled  his  duty  in 
returning  the  empty  purse,  then  Japan's  conduct  may  be  tol- 
erated. 

"If  it  be  right  for  Japan  to  annex  the  territory  of  an  Ally, 
then  it  cannot  be  wrong  for  Italy  to  retain  Fiume  taken  from 
the  enemy. 

"If  we  support  Japan's  claim,  we  abandon  the  democracy 
of  China  to  the  domination  of  the  Prussianized  militarism  of 
Japan. 

"We  shall  be  sowing  dragons'  teeth. 

"It  can't  be  right  to  do  wrong  even  to  make  peace.  Peace 
is  desirable,  but  there  are  things  dearer  than  peace,  justice  and 
freedom. 

* '  Sincerely  yours, 

"T.  H.  Buss. 
"THE  PRESIDENT/' 


APPENDIX  L 

SECRET  MINUTES  ON  THE  SHANTUNG  SETTLEMENT 

British  Delegation, 
Paris,  5th  June,  1919. 
Your  Excellency: 

I  have  laid  before  the  Council  of  the  Principal  Allied  and 
Associated  Powers  your  letter  of  May  28th,  asking  for  a  copy 
of  the  minutes  of  their  proceedings  bearing  upon  Kiao-Chow  and 
the  Shantung  question. 

In  reply,  I  am  instructed  to  say  that  the  minutes  of  the 
Council  are  only  distributed  to  the  persons  who  are  actually 
present  at  the  meetings. 

I  have  been  authorized,  however,  on  behalf  of  the  Council 


340  APPENDICES 

«» 

to  communicate  to  Your  Excellency,  for  the  strictly  confidential 
use  of  the  Chinese  Delegation,  the  attached  memorandum, 
which  is  based  on  the  records  of  the  Council  and  contains  the 
assurances  given  by  the  Japanese  respecting  the  eventual  restora- 
tion of  the  leased  territory  of  Kiao-Chow  and  the  disposal  of 
the  German  rights  in  Shantung. 

I  am,  Your  Excellency's  obedient  servant, 

(Signed)     M.  P.  A.  HANKEY. 
His  Excellency  MONSIEUR  Lou  TSENG-TSIANG, 
Chinese  Delegation. 

THE  MEMORANDUM 

Memorandum  prepared  for  the  strictly  confidential  use  of  the 
Chinese  Delegation  at  the  Peace  Conference,  based  on  the  records 
of  the  Council  of  the  principal  Allied  and  Associated  Powers,  and 
containing  the  assurances  given  by  the  Japanese  respecting  the 
eventual  restoration  to  China  of  the  leased  territory  of  Kiao- 
Chow  and  the  disposal  of  the  German  rights  in  Shantung. 

The  policy  of  Japan  consists  in  restoring  the  Shantung  Penin- 
sula to  China  in  full  sovereignty,  only  retaining  the  economic 
privileges  which  had  been  granted  to  Germany  as  well  as  the 
right  of  establishing  a  concession  at  Tsingtao  under  the  usual 
conditions.  So  far  as  the  existing  railway  is  concerned,  i.  e., 
the  Tsingtao-Tsinan  railway  and  its  branches,  which  is  to  become 
a  mixed  Sino-Japanese  enterprise,  the  owners  of  the  railway  will 
use  special  police  only  to  ensure  security  for  traffic.  They  will 
be  used  for  no  other  purpose.  The  police  force  is  to  be  composed 
of  Chinese,  and  such  Japanese  instructors  as  the  directors  of  the 
railway  may  select  will  be  appointed  by  the  Chinese  Government. 

The  Japanese  propose  to  surrender  all  military  control  over 
the  Peninsula,  including  the  fifty-kilometre  zone  around  Kiao- 
Chow  within  which  German  troops  were  allowed  but  not  Chinese, 
and  all  interference  with  the  civil  administration  of  the  territory. 
Their  intention  is  fully  to  restore  Chinese  sovereignty  within  the 
leased  territory. 

They  further  gave  assurances  that  the  maintenance  of  a  garri- 
son at  Tsinan  is  purely  provisional  measure  which  will  be  con- 
tinued only  during  a  period  of  transition  immediately  following 
peace,  and  this  period  it  is  their  intention  to  make  as  short  as 


APPENDICES  341 

possible.  They  explained  that  the  troops  had  previously  been 
lined  out  along  the  railway  at  a  number  of  points,  and  the  con- 
centration at  Tsingtao  and  Tsinanfu  had  been  regarded  merely 
as  a  step  towards  their  final  withdrawal.  Although  no  date  was 
named  for  the  determination  of  this  transitory  arrangement  the 
Japanese  gave  assurances  that  the  troops  would  be  withdrawn 
as  soon  as  practicable  and  that  the  fortifications  built  by  Ger- 
many would  not  be  included  in  the  area  of  the  residential  con- 
cession to  be  granted  to  Japan  in  the  town  of  Tsingtao. 

The  German  rights  which  the  Japanese  propose  to  retain  are 
economic  in  their  character.  They  consist  in: 

1.  A  right  to  claim  a  residential  concession  at  Tsingtao,  which 
however  does  not  exclude,  and  was  not  intended  to  exclude,  the 
right  also  for  other  countries  to  organize  an  international  con- 
cession there. 

2.  The  German  rights  in  the  railways  already  built,  and  the 
mines  associated  with  them.     The  railways  are  built  on  land 
which  is  in  full  Chinese  sovereignty  and  subject  to  Chinese  law. 

3.  Concessions  granted  to  the  German  for  building  two  other 
railways.      These   railways,   viz. :   the   Kaomi-Hsuchowf  ul   and 
Tsinan-Shuntefu  lines,  are  to  be  built  with  Japanese  capital,  and 
the  Japanese  capitalists  are  at  this  moment  negotiating  with  the 
Chinese  Government  as  to  the  terms  on  which  the  necessary 
money  will  be  provided.    The  Chinese  Government  will  be  able 
to  secure  the  same  position  in  regard  to  these  railways  as  it  has 
over  other  railways  constructed  by  foreign  capital. 

Further,  the  Japanese  delegation  gave  explicit  assurances  to 
the  effect  (a)  That  any  concession  which  China  gives  them  at 
Tsingtao  will  not  exclude  other  foreign  enterprise  from  the  port. 

(b)  That  the  economic  control  of  the  existing  railway,  which 
the  possession  of  the  majority  of  the  shares  gives  them  will  not 
be  used  in  any  way  to  discriminate  between  the  trade  facilities  of 
different  nations. 

It  should  be  mentioned  that  the  Japanese  delegates  through- 
out these  conversations  made  it  clear  that,  in  the  event  of  any 
failure  of  China  to  carry  out  her  share  of  the  bargain,  for 
example,  she  refused  to  cooperate  in  the  formation  of  the  police 
force  or  to  admit  the  employment  of  Japanese  instructors,  Japan 
reserved  the  right  to  fall  back,  in  the  last  resort,  on  the  Sino- 
Japanese  Agreements  of  1915  and  1918.  President  Wilson  ex- 
pressed the  hope  that,  in  the  event  of  such  failure  on  the  part 
of  China,  Japan,  instead  of  appealing  to  the  Agreements,  should 


342  APPENDICES 

voluntarily  apply  for  mediation  by  the  Council  of  the  League 
of  Nations. 

The  Japanese  Delegates  pointed  out  that,  if  China  carried 
out  her  obligation  loyally,  the  case  would  not  arise,  and  that,  even 
if  the  matter  were  submitted  to  the  League  of  Nations,  Japan 
nevertheless  must  reserve  her  right  in  the  last  analysis  to  base 
herself  on  the  Agreements. 

President  Wilson  insisted  that  nothing  he  had  said  should 
be  construed  as  a  recognition  of  the  notes  exchanged  between 
Japan  and  China,  because  they  were  based  upon  original 
demands  against  which  the  government  of  the  United  States  had 
earnestly  protested. 

(Signed)     M.  P.  A.  HANKEY, 

Secretary. 


APPENDIX  M 

LETTER  OF  THE  AMERICAN  CHAMBER  OF  COMMERCE  OF  CHINA 

Shanghai,  December  16,  1918. 
DR.  PAUL  S.  REINSCH, 

American  Minister  to  China, 
Peking. 

Dear  Sir: 

The  American  Chamber  of  Commerce  of  China,  several  mem- 
bers of  which  organization  have  interests  in  Tsingtao,  have  the 
honor  to  draw  your  urgent  attention  to  the  terms  on  which  the 
Japanese  Government  has  declared  its  readiness  to  restore  the 
Leased  Territory  of  Kiaochow  to  China  and  to  what  in  our 
opinion  would  be  their  inevitable  consequence  to  American  inter- 
ests in  North  China. 

You  will  recall  that  the  Note  relative  to  the  Leased  Territory 
presented  by  the  Japanese  Minister  to  the  Chinese  Government 
in  the  autumn  of  1917  stated — we  quote  the  translation  pub- 
lished by  the  Japanese  Chronicle  on  November  8th,  1917 — that : 

"When  after  the  termination  of  the  present  war  the  leased 
territory  of  Kiaochow  Bay  is  completely  left  to  the  free  disposal 
of  Japan,  the  Japanese  Government  will  restore  the  said  leased 
territory  to  China  under  the  following  conditions: 

1 '  1.  The  whole  of  Kiaochow  Bay  to  be  opened  as  a  commercial 
port. 


APPENDICES  343 

"2.  A  concession  under  the  exclusive  jurisdiction  of  Japan  to 
be  established  at  a  place  to  be  designated  by  the  Japanese  Gov- 
ernment. 

"3.  If  the  foreign  powers  desire  it,  an  international  concession 
may  be  established. 

"4.  As  regards  the  disposal  to  be  made  of  the  buildings  and 
properties  of  Germany  and  the  conditions  and  procedures  relat- 
ing thereto,  the  Japanese  Government  shall  arrange  the  matter 
by  mutual  agreement  before  the  restoration. ' ' 

We  submit  that  in  view  of  actual  developments  there  these 
terms  would  amount  in  reality  to  the  absolute  control  of  Tsingtao 
and  its  hinterland  by  the  Japanese  and  would  in  effect  be  equiv- 
alent, from  a  business  point  of  view,  to  outright  annexation 
of  the  Port  and  to  virtual  annexation  of  the  Province  by  the 
Japanese  Government.  For  the  concession  which  the  Japanese 
intend  to  demand  is  that  part  of  Tsingtao  in  which  the  com- 
merce of  the  Port  is  inevitably  centered,  namely  the  districts  sur- 
rounding the  harbor,  the  Customs  House,  and  the  proposed  new 
railway  would  be  the  present  residential  district  and  this  could 
be  rendered  valueless  from  the  point  of  view  of  revenue  by  such 
" disposal"  as  is  proved  in  clause  4  of  the  terms  quoted  above, 
which  would  even  include  the  Public  Slaughter  House  and  the 
Electricity  Station. 

The  evidence  for  this  view  of  Japanese  intention  is  unmis- 
takable and  patent.  It  meets  the  eyes  in  business  houses,  banks, 
schools  and  tea-houses,  and  private  residence,  all  outcome  of  an 
adroitly  conceived  and  rapidly  executed  program  designed 
entirely  to  occupy  and  effectively  enrich  the  district  essential  to 
trade  and  commerce.  What  Japanese  control  of  wharves,  rail- 
ways and  Customs  Houses  would  mean,  has,  we  submit,  been 
amply  illustrated  in  Dalny  and  Manchuria,  where  are  practically 
no  prospects  whatever  of  American  or  other  "foreign"  participa- 
tion in  business  which  should  be  open  to  all. 

Accordingly  we  urge  that,  if  non- Japanese  subjects  are  to  have 
equal  opportunities  with  the  Japanese  for  business  in  Tsingtao 
and  the  Province  of  Shantung  as  a  whole,  the  whole  port  should 
be  either  internationalized  or  restored  to  the  Chinese  Government 
and  further  that  in  either  case,  if  the  Japanese  be  given  the 
choice  of  location  for  their  concession  all  wharves,  railways  and 
Customs  House  should  be  kept  from  their  control. 

We  urge  this  not  only  on  behalf  of  American  interests  in 
Tsingtao,  but  on  behalf  of  those  of  Shanghai  and  Tientsin,  the 


344  APPENDICES 

export  and  import  trade  of  which  would  be  seriously  handi- 
capped were  control  of  this  port  and  of  the  Shantung  Railway 
and  its  proposed  extensions  to  be  vested  in  Japanese  hands, 
to  be  made  the  hinge  of  an  Open  Door  for  Japanese  only.  In 
view  of  the  recent  developments  in  America  and  the  probability 
of  an  almost  immediate  discussion  of  the  Far  Eastern  situation 
as  a  whole  we  feel  sure  that  you  will  appreciate  the  urgency 
of  this  memorandum. 

As  to  the  preference  of  this  Chamber  in  reference  to  the  future 
disposition  of  this  former  German  leased  property,  we  are  in 
favor  of  making  it  a  real  international  settlement  with  all  harbor 
facilities  and  water-front  privileges  under  the  absolute  control 
of  an  international  commission.  As  soon  as  our  special  com- 
mittee can  make  further  investigation  of  this  matter  of  inter- 
national control,  we  shall  take  pleasure  in  sending  to  you  copies 
of  our  memorandum  and  recommendations. 

As  you  are  doubtless  aware,  detailed  information  cor- 
roborating and  illustrating  our  views  is  already  in  the  possession 
of  the  American  Government,  but  should  you  require  further  or 
specific  particulars,  we  shall  be  ready  to  supply  them. 

Very  truly  yours, 
(Signed)     AMERICAN  CHAMBER  OF  COMMERCE  OF  CHINA. 


APPENDIX  N 

The  following  memorandum  on  the  future  of  Tsingtao  which 
was  drawn  up  ~by  the  British  Chamber  of  Commerce  in  that  port 
and  with  the  general  principles  of  which  the  Associated  British 
Chambers  of  Commerce  in  China  and  Hongkong  are  in  agree- 
ment, was  forwarded  to  H.  M.  Minister  by  the  Association: 

MEMORANDUM 

The  Tsingtao  question  has  now  entered  on  a  phase  when  some 
kind  of  solution  must  soon  be  arrived  at.  The  Chinese  must 
choose  between  negotiating  directly  with  Japan  or  submitting 
the  whole  question  to  the  League  of  Nations.  In  the  former 
event  the  interests  of  foreign  Powers  would  probably  be  entirely 
ignored,  but  the  latter  event  the  League  of  Nations  would  prob- 
ably take  into  consideration  the  vested  interests  acquired  by 
England  and  other  nations  in  the  course  of  nineteen  years' 
trading  under  treaty  conditions  at  Tsingtao.  That  is  to  say, 


APPENDICES  345 

any  solution  arrived  at  would  be  international  in  character. 
Believing  that  the  time  is  becoming  ripe  for  such  a  solution,  the 
British  Chamber  of  Commerce  at  Tsingtao  have  deemed  it 
advisable  to  place  upon  record  what  in  their  opinion  would 
constitute  a  fair  settlement  of  the  Tsingtao  question,  namely,  a 
settlement  which  would  preserve  intact  the  sovereign  rights  of 
China  and  at  the  same  time  allow  every  nation  to  live  and  trade 
at  Tsingtao  on  a  footing  of  equality. 

JAPAN'S  PRIMAL  PLEDGE 

I.  Japan  undertook  the  reduction  of  Tsingtao  on  the  express 
promise  that  she  would  return  Tsingtao  to  China.     In  conse- 
quence of  that  promise  China  allowed  a  free  passage  to  the 
Japanese  army,  the  Powers  gave  Japan  a  free  hand  and  she  was 
assisted  by  British  troops.    Legally  as  well  as  morally,  therefore, 
England  and  the  other  Powers  have  the  right  to  insist  a  reason- 
able interpretation  be  given  to  this  promise.     That  is  to  say, 
the  Powers  demand  that  this  promise  must  not  be  merely  ful- 
filled on  paper  and  completely  nullified  in  practice. 

THE  FIRST  ESSENTIAL 

II.  If  Tsingtao  is  to  be  returned  to  the  sovereignty  of  China 
the  very  first  step  is  to  place  the  harbor  and  harbor  lights,  the 
docks  and  wharves  and  the  collection  of  duties  under  the  control 
of  China.    If  this  is  not  done  the  promise  is  absolutely  meaning- 
less.    It  follows  that,  in  view  of  the  vested  trading  interests 
referred  to  above,  Tsingtao  must  be  placed  on  the  same  footing 
as  other  ports  in  China.    The  organ  for  the  control  of  harbor, 
docks,  wharves  and  collections  of  customs  duties  must  be  the 
Maritime  Customs,  and  the  Maritime  Customs  must  be  simply  an 
ordinary  branch  of  the  Chinese  customs  service.     The  appoint- 
ment of  the  staff  must  be  left  to  the  unfettered  direction  of  the 
inspector  general  in  Peking  and  if  that  discretion  is  exercised 
in  a  manner  detrimental  to  the  interests  of  any  nation,  diplo- 
matic representations  in  Peking  afford  a  remedy. 

INTERNATIONAL  CONTROL 

III.  If  the  leased  territory  is  returned  to  the  sovereignty  of 
China  the  present  military  administration  would  ipso  facto  be 
abolished  and  the  question  then  arises  what  form  of  administra- 
tion is  to  take  its  place.     There  are  various  alternatives  which 
may  be  discussed  and  considered  but  the  only  solution  which 


346  APPENDICES 

British  interests  in  China  regard  as  satisfactory  and  fair  to  all 
concerned  is  the  establishment  of  a  municipality  with  elected 
councillors  and  a  permanent  staff  such  as  exists  at  Shanghai  and 
other  ports  with,  however,  this  important  addition :  that,  unlike 
Shanghai,  Chinese  residents  in  Tsingtao,  equally  with  those 
of  other  nationalities,  shall  have  the  right  to  vote  and  sit  on  the 
council.  The  law  administered  should  be  the  law  of  China, 
limited  only  by  the  safeguards  of  extraterritoriality  so  long  as 
such  safeguards  are  maintained  in  the  rest  of  China. 

THE  RAILWAY 

IV.  The  railway  is  a  difficult  problem  capable  of  several  solu- 
tions.   It  is  obvious,  however,  that  it  is  utterly  incompatible  with 
China 's  sovereignty  that  the  railway  should  be  practically  foreign 
territory,  garrisoned  by  foreign  troops  and  guarded  by  foreign 
military  police,  and  that  the  railway  should  control  the  Tsingtao 
docks  and  wharf  office.    The  very  least  that  should  be  demanded 
is  that  the  docks  and  wharf  office  be  placed  under  the  control 
of  the  Chinese  Maritime  Customs  at  Tsingtao,  that  the  foreign 
troops  should  be  entirely  withdrawn  and  a  Chinese  police  force 
take  the  place  of  the  military  police,  and  that,  if  the  railway 
itself  is  to  be  treated  as  a  foreign  concession,   it  should  be 
managed  as  an  economic  concession  pure  and  simple.     It  is 
suggested,  however,  that  the  question  of  the  management  and 
control  of  the  Shantung  Railway  should  not  be  dealt  with  as 
an  isolated  problem  but  that  it  should  be  settled  in  conjunction 
with  all  other  railways  in  China  as  part  of  a  comprehensive 
scheme  of  unification  of  railways. 

THE  TRANSFER  OF  SOVEREIGNTY 

V.  Assuming  that  the  Tsingtao  question  is  settled  on  an  inter- 
national basis  as  outlined  above,  the  only  feasible  method  of 
settlement  would  supervise  the  transfer  of  sovereignty  from 
Japan  to  China  and  have  authority  to  settle  the  numerous  ques- 
tions of  detail  which  would  arise.     Such  a  commission  might 
be  appointed  by  the  League  of  Nations  and  might  contain  repre- 
sentatives of   China,   Japan,   England,   America,   and  France. 
Many  very  important  questions  could  be  left  to  the  unfettered 
decision  of  this  commission.     For  example,  when  handing  over 
control  of  the  harbor,  etc.,  to  the  Chinese  Maritime  Customs  it 
might  be  found  desirable  to  stipulate  that  the  present  free  port 
area  be  maintained  as  a  free  port,  and  in  deciding  the  fate  of  the 


APPENDICES  347 

railway  it  would  certainly  be  desirable  to  ensure  a  continuance 
of  the  freedom  from  vexatious  inland  taxation  which  was  secured 
by  Germany.  With  regard  to  the  municipal  administration  of 
Tsingtao,  the  commission,  besides  settling  the  composition  and 
organization  of  the  council  and  its  permanent  staff,  would  be 
faced  with  the  difficulty  that  ordinary  municipal  taxation  would 
be  insufficient  for  the  proper  upkeep  of  the  town.  They  would 
have  to  arrange  for  a  permanent  contribution  of  20  per  cent,  of 
the  customs  revenue  as  arranged  in  the  agreement  with  Germany 
in  1905.  They  would  also  have  to  insist  that  the  fiscal  lands 
should  be  treated  as  a  source  of  municipal  revenue  as  was  the 
case  before  the  advent  of  the  Japanese  military  administra- 
tion. Any  further  alienation  of  those  lands  or  any  attempt 
to  convert  the  10  years'  leases  granted  by  the  military  admin- 
istration into  freeholds  should  be  prevented. 

SPECIAL  INTERESTS  EQUAL 

It  is  probable  that  the  commission  in  the  course  of  its  labors 
will  be  met  by  a  demand  from  China  for  a  fuller  recognition 
of  her  sovereignty  than  is  accorded  to  her  at  other  places  where 
she  comes  into  contact  with  foreigners,  and  a  demand  from  Japan 
for  special  consideration  of  the  interests  which  she  has  built  up 
since  1914.  There  is  no  reason  why  both  these  demands  should 
not  be  met  in  a  sympathetic  spirit,  provided  only  that  the 
only  object  which  British  merchants  have  in  view — equality  of 
opportunity — is  not  placed  in  jeopardy. 

VI.  To  sum  up,  the  policy  which  is  advocated  by  the  British 
Chamber  of  Commerce  at  Tsingtao  is  that  Tsingtao  should  be 
returned  by  Japan  to  China  and  that  an  international  commis- 
sion be  appointed  by  the  League  of  Nations  to  safeguard  the 
sovereignty  of  China  and  the  vested  trading  interests  which 
should  be  settled  by  the  commission  are : 

1.  The  customs  should  be  an  ordinary  branch  of  the  Chinese 
Maritime  Customs  and  the  staff  should  be  appointed  irrespective 
of  nationality  by  the  inspector  general  of  customs  in  Peking. 

2.  The   customs   should   control   the   harbor,   harbor   lights, 
wharves,  docks  and  wharf  godowns  (warehouses). 

3.  The  leased  territory  should  be  administered  by  a  Municipal 
Council  elected  on  property  franchise  in  respect  of  which  every 
nationality  should  be  on  a  footing  of  equality. 

4.  All  public  utilities  such  as  slaughter  house,  water  works, 
etc.,  should  be  handed  over  to  the  municipality. 


348  APPENDICES 

5.  A  contribution  of  20  per  cent,  of  the  customs  revenue  should 
be  paid  to  the  municipality  to  facilitate  upkeep  of  the  territory 
as  heretofore. 

6.  Revenue  from  fiscal  lands  should  be  appropriated  by  the 
municipality  and  no  further  alienation,  etc.,  of  these  lands  per- 
mitted. 

7.  The  railway  should  be  managed  on  an  economic  and  not  a 
political  basis  and  if  possible,  its  ultimate  disposition  should 
be  fitted  into  a  general  scheme  of  unification  of  railways. 

8.  The  railway  should  be  perpetually  free  of  likin  and  other 
inland  taxation. 

9.  The  free  port  area  should  be  maintained. 


APPENDIX  O 

IN  THE  SENATE  OF  THE  UNITED  STATES 

67th  Congress,  2nd  Session.     S.  Res.  221 

RESOLUTION 

Requesting  the  President  of  the  United  States  to  furnish  the 
Senate  information  as  to  what  steps,  if  any,  have  been  taken 
to  give  effect  to  certain  declarations  and  policies  relative  to 
controversies  over  occupied  territory  in  the  Far  East,  and  other 
related  questions. 

By  MR.  WALSH  of  Montana. 
January  20,  1922. — Ordered  to  lie  over  under  the  rule. 

January  20,  1922 

Mr.  Walsh  of  Montana  submitted  the  following  resolution; 
which  was  ordered  to  lie  over  under  the  rule. 

RESOLUTION 

Whereas,  In  an  ultimatum  dispatched  by  the  Emperor  of 
Japan  to  the  Imperial  German  Government  on  August  15,  1914, 
which  marks  the  entrance  of  the  Eastern  Empire  in  the  World 
War,  it  is  stated:  "We  consider  it  highly  important  and  neces- 
sary in  the  present  situation  to  take  measures  to  remove  the 
causes  of  all  disturbance  of  the  peace  in  the  Far  East.  The 
Imperial  Japanese  Government  sincerely  believes  it  to  be  its 
duty  to  give  advice  to  the  Imperial  German  Government  to  carry 
out  the  following  two  propositions:  First,  to  withdraw  imme- 
diately from  Japanese  and  Chinese  waters  the  German  men-of- 
war  and  armed  vessels  of  all  kinds ;  second,  to  deliver  on  a  date 


APPENDICES  349 

not  later  than  September  15  to  the  Imperial  Japanese  authorities, 
without  condition  or  compensation,  the  entire  leased  territory 
of  Kiaochow  with  a  view  to  the  eventual  restoration  of  the  same 
to  China";  and 

Whereas,  On  May  6,  1915,  after  the  conquest  of  Shantung 
had  been  consummated  by  an  Anglo-Japanese  expeditionary 
force  and  the  Japanese  Army  was  in  possession  of  Shantung  dis- 
tricts greatly  exceeding  in  extent  the  leased  territory  referred  to 
in  the  ultimatum,  the  Secretary  of  State  of  the  United  States 
addressed  to  the  Governments  of  Japan  and  China  the  following 
identic  notes :  "  In  view  of  the  circumstances  of  the  negotiations 
which  have  taken  place  or  which  are  now  pending  between  the 
Governments  of  China  and  of  Japan  and  the  agreements  which 
have  been  reached  as  a  result  thereof,  the  Government  of  the 
United  States  has  the  honor  to  notify  the  Government  of  the 
Chinese  Republic  that  it  can  not  recognize  any  agreement  or 
undertaking  which  has  been  entered  into  between  the  Govern- 
ments of  China  and  Japan  impairing  the  treaty  rights  of  the 
United  States  and  its  citizens  in  China,  the  political  or  territorial 
integrity  of  the  Republic  of  China,  or  the  international  policy 
commonly  known  as  the  open-door  policy;"  an  identical  note 
being  at  the  same  time  handed  to  the  Japanese  Government  by 
the  American  Embassy  in  Tokyo;  and 

Whereas,  On  August  24,  1915,  Count  Okuma,  Prime  Minister 
of  Japan,  cabled  the  American  press  the  following  message: 
"As  Premier  of  Japan  I  have  stated,  and  I  now  again  state  to 
the  people  of  America  and  of  the  world,  that  Japan  has  no 
desire  to  secure  more  territory,  no  thought  of  depriving  China 
or  any  other  peoples  of  anything  which  they  now  possess ; ' '  and 

Whereas,  In  October,  1919,  the  majority  party  of  the  United 
States  Senate  recorded  its  disapproval  of  the  Shantung  award 
and  adopted  the  following  reservation  to  the  Treaty  of  Versailles 
known  as  the  Lodge  Amendment,  from  the  fact  that  it  was 
drawn  up  and  presented  by  the  Honorable  Henry  Cabot  Lodge, 
chairman  of  the  Committee  on  Foreign  Relations,  one  of  the 
Members  of  this  body  now  serving  with  the  American  delega- 
tion to  the  conference,  which  reads :  *  *  The  United  States  with- 
holds its  assent  to  articles  156,  157,  158  and  reserves  full  liberty 
of  action  with  respect  to  any  controversy  which  may  arise  under 
said  articles  between  the  Republic  of  China  and  the  Empire  of 
Japan;"  and 

Whereas,  In  the  course  of  the  same   debate  the   minority 


350  APPENDICES 

party  of  the  Senate  voted  for  a  reservation  to  the  treaty  whose 
ratification  they  advocated  which,  offered  by  the  Honorable  Key 
Pittman,  a  member  of  the  Committee  on  Foreign  Relations,  pro- 
vided "That  in  advising  and  consenting  to  the  ratification  of 
said  treaty  the  United  States  understands  that  the  German 
rights  and  interests  renounced  by  Germany  in  favor  of  Japan 
under  the  provisions  of  articles  156,  157  and  158  of  said  treaty 
are  to  be  returned  by  Japan  to  China  at  the  termination  of  the 
present  war  by  the  adoption  of  this  treaty,  as  provided  in  the 
exchanged  notes  between  the  Japanese  and  Chinese  Governments 
under  date  of  May  25,  1915;"  and 

Whereas,  On  July  1,  1921,  the  Honorable  Charles  E.  Hughes, 
Secretary  of  State,  addressed  a  note  to  the  Honorable  Alfred 
Sze,  Chinese  Minister  to  the  United  States,  in  which  he  stated 
the  position  of  the  American  Government  in  the  following 
terms:  "The  Government  of  the  United  States  never  has  asso- 
ciated itself  with  any  arrangement  which  sought  to  establish  any 
special  rights  in  China  which  would  abridge  the  rights  of  the 
subjects  or  citizens  of  other  friendly  States;  and  I  am  happy 
to 'assure  you  that  it  is  the  purpose  of  this  Government  neither 
to  participate  in  nor  to  acquiesce  in  any  arrangement  which 
might  purport  to  establish  in  favor  of  foreign  interest  a  superi- 
ority of  rights  with  respect  to  commercial  and  economic  develop- 
ment in  designated  regions  of  the  territories  of  China ; ' '  and 

Whereas,  The  text  of  the  invitation  sent  to  the  Government  of 
China  by  the  President  of  the  United  States  under  date  of 
August  11,  1921,  reads:  "It  is  quite  clear  that  there  can  be  no 
final  assurance  of  the  peace  of  the  world  in  the  absence  of  the 
desire  for  peace,  and  the  prospect  of  reduced  armament  is  not 
a  hopeful  one,  unless  this  desire  finds  expression  in  a  practical 
effort  to  remove  causes  of  misunderstanding,  and  to  seek  ground 
for  agreement  as  to  principles  and  their  application.  It  is  the 
earnest  wish  of  this  Government  that  through  an  interchange 
of  views  with  the  facilities  afforded  by  a  conference  it  may  be 
possible  to  find  a  solution  of  Pacific  and  Far  Eastern  problems 
of  unquestioned  importance  at  this  time ; ' '  and 

Whereas,  The  Honorable  Charles  Evans  Hughes,  Secretary  of 
State,  has  in  the  course  of  his  correspondence  with  Japan  and 
the  other  powers  signatories  of  the  Treaty  of  Versailles  declared : 
"There  would  be  no  valid  or  effective  disposition  of  the  over- 
seas possessions  of  Germany  now  under  consideration  without  the 
assent  of  the  United  States ; ' '  and 


APPENDICES  351 

Whereas,  The  Arms  Conference  at  which  Far  Eastern  prob- 
lems were  to  be  discussed  has  been  assembled  in  the  city  of 
Washington  since  November  12  of  last  year,  and  although  no 
plenary  public  sessions  of  the  conference  have  been  held  since 
December  10,  1921,  it  is  officially  communicated  that  the  Shan- 
tung retrocession  has  not  been  officially  discussed,  although 
informal  conversations  have  from  time  to  time  been  pursued 
by  the  Chinese  and  the  Japanese  Plenipotentiaries,  hitherto 
without  result,  as  to  the  manner  of  restoring  the  occupied  terri- 
tory to  its  rightful  owners  in  accordance  with  the  terms  of  the 
Japanese  declaration  of  war  upon  Germany;  and 

Whereas,  It  is  contemplated  in  the  so-called  four-power  pact 
about  to  be  submitted  for  ratification  that  controversies  likely  to 
give  rise  to  war  affecting  the  insular  possessions  or  dominions  of 
the  powers  signatory  thereto  in  the  Pacific  shall  be  composed, 
if  possible,  by  conferences  between  them;  and 

Whereas,  The  said  powers  are  all  now  represented  at  the 
said  Arms  Conference  in  session  in  the  city  of  Washington :  Now, 
therefore,  be  it 

1  Resolved,  That  the  President  of  the  United  States  be 

2  requested  to  communicate  to  the  United  States  Senate,  if  it 

3  is  not  incompatible  with  the  public  interest,  what  steps,  if 

4  any,  have  been  taken  to  give  effect  in  substance  as  well  as 

5  in  form  to  the  foregoing  declarations  and  policies. 


APPENDIX  P 

TREATY  FOR  THE  SETTLEMENT  OP  OUTSTANDING  QUESTIONS 
RELATIVE  TO  SHANTUNG 

China  and  Japan,  being  equally  animated  by  a  sincere  desire 
to  settle  amicably  and  in  accordance  with  their  common  interest 
outstanding  questions  relative  to  Shantung,  have  resolved  to 
conclude  a  treaty  for  the  settlement  of  such  questions,  and  have 
to  that  end  named  as  their  Plenipotentiaries,  that  is  to  say : 

His  Excellency  the  President  of  the  Chinese  Republic: 
SAO-KE  ALFRED  SZE,  Envoy  Extraordinary  and  Minister 

Plenipotentiary; 

VIKYUIN  WELLINGTON  Koo,  Envoy  Extraordinary  and  Min- 
ister Plenipotentiary;  and 


352  APPENDICES 

CHUNG-HUI  WANG,  Former  Minister  of  Justice; 

His  Majesty  the  Emperor  of  Japan: 

BARON  TOMOSABUBO  KATO,  Minister  of  the  Navy; 

BARON  KIJURO  SHIDEHARA,  Ambassador  Extraordinary  and 

Plenipotentiary;  and 
MASANAO  HANIHARA,   Vice-Minister  for  Foreign  Affairs; 

Who,  having  communicated  to  each  other  their  respective  full 
powers,  found  to  be  in  good  and  due  form,  have  agreed  upon  the 
following  Articles: 

SECTION  I 
Restoration  of  the  Former  German  Leased  Territory  of  Kiaochow 

! 

Article  I 

Japan  shall  restore  to  China  the  former  German  Leased 
Territory  of  Kiaochow. 

Article  II 

The  Government  of  the  Chinese  Republic  and  the  Government 
of  Japan  shall  each  appoint  three  Commissioners  to  form  a 
Joint  Commission,  with  powers  to  make  and  carry  out  detailed 
arrangements  relating  to  the  transfer  of  the  administration 
of  the  former  German  Leased  Territory  of  Kiaochow  and  to  the 
transfer  of  public  properties  in  the  said  Territory  and  to  settle 
other  matters  likewise  requiring  adjustment. 

For  such  purposes,  the  Joint  Commission  shall  meet  imme- 
diately upon  the  coming  into  force  of  the  present  Treaty. 

Article  III 

The  transfer  of  the  administration  of  the  former  German 
Leased  Territory  of  Kiaochow  and  the  transfer  of  public  prop- 
erties in  the  said  Territory,  as  well  as  the  adjustment  of  other 
matters  under  the  preceding  Article,  shall  be  completed  as  soon 
as  possible,  and,  in  any  case,  not  later  than  six  months  from 
the  date  of  the  coming  into  force  of  the  present  Treaty. 

Article  IV 

The  Government  of  Japan  undertakes  to  hand  over  to  the 
Government  of  the  Chinese  Republic  upon  the  transfer  to  China 
of  the  administration  of  the  former  German  Leased  Territory 
of  Kiaochow,  such  archives,  registers,  plans,  title-deeds  and 


APPENDICES  353 

other  documents  in  the  possession  of  Japan,  or  certified  copies 
thereof,  as  may  be  necessary  for  the  transfer  of  the  administra- 
tion, as  well  as  those  that  may  be  useful  for  the  subsequent 
administration  by  China  of  the  said  Territory  and  of  the  Fifty 
Kilometre  Zone  around  Kiaochow  Bay. 

SECTION  II 
Transfer  of  Public  Properties 

Article  V 

The  Government  of  Japan  undertakes  to  transfer  to  the 
Government  of  the  Chinese  Eepublic  all  public  properties  includ- 
ing land,  buildings,  works  or  establishments  in  the  former  Ger- 
man Leased  Territory  of  Kiaochow,  whether  formerly  possessed 
by  the  German  authorities,  or  purchased  or  constructed  by  the 
Japanese  authorities  during  the  period  of  the  Japanese  admin- 
istration of  the  said  Territory,  except  those  indicated  in  Article 
VII  of  the  Present  Treaty. 

Article  VI 

In  the  transfer  of  public  properties  under  the  preceding 
Article,  no  compensation  will  be  claimed  from  the  Government  of 
the  Chinese  Kepublic:  Provided,  however,  that  for  those  pur- 
chased or  constructed  by  the  Japanese  authorities,  and  also  for 
the  improvements  on  or  additions  to  those  formerly  possessed 
by  the  German  authorities,  the  Government  of  the  Chinese 
Republic  shall  refund  a  fair  and  equitable  proportion  of  the 
expenses  actually  incurred  by  the  Government  of  Japan,  having 
regard  to  the  principle  of  depreciation  and  continuing  value, 

Article  VII 

Such  public  properties  in  the  former  German  Leased  Territory 
of  Kiaochow  as  are  required  for  the  Japanese  Consulate  to  be 
established  in  Tsingtao  shall  be  retained  by  the  Government  of 
Japan,  and  those  required  more  especially  for  the  benefit  of  the 
Japanese  community,  including  public  schools,  shrines  and 
cemeteries,  shall  be  left  in  the  hands  of  the  said  community. 

Article  VIII 

Details  of  the  matters  referred  to  in  the  preceding  three 
Articles  shall  be  arranged  by  the  Joint  Commission  provided 
for  in  Article  II  of  the  present  Treaty. 


354  APPENDICES 

SECTION   III 
Withdrawal  of  Japanese  Troops 

Article  IX 

The  Japanese  troops,  including  gendarmes,  now  stationed 
along  the  Tsingtao-Tsinanfu  Railway  and  its  branches,  shall  be 
withdrawn  as  soon  as  the  Chinese  police  or  military  force  shall 
have  been  sent  to  take  over  the  protection  of  the  Railway. 

Article  X 

The  disposition  of  the  Chinese  police  or  military  force  and  the 
withdrawal  of  the  Japanese  troops  under  the  preceding  Article 
may  be  effected  in  sections. 

The  date  of  the  completion  of  such  process  for  each  section 
shall  be  arranged  in  advance  between  the  competent  authorities 
of  China  and  Japan. 

The  entire  withdrawal  of  such  Japanese  troops  shall  be 
effected  within  three  months,  if  possible,  and,  in  any  case,  not 
later  than  six  months,  from  the  date  of  the  signature  of  the 
present  Treaty. 

Article  XI 

The  Japanese  garrison  at  Tsingtao  shall  be  completely  with- 
drawn simultaneously,  if  possible,  with  the  transfer  to  China 
of  the  administration  of  the  former  German  Leased  Territory  of 
Kiaochow,  and,  in  any  case,  not  later  than  thirty  days  from 
the  date  of  such  transfer. 

SECTION  IV 
Maritime  Customs  at  Tsingtao 

Article  XII 

The  Custom  House  at  Tsingtao  shall  be  made  an  integral 
part  of  the  Chinese  Martime  Customs  upon  the  coming  into 
force  of  the  present  Treaty. 

Article  XIII 

The  Provisional  Agreement  of  August  6,  1915,  between  China 
and  Japan,  relating  to  the  reopening  of  the  Office  of  the  Chinese 
Maritime  Customs  at  Tsingtao  shall  cease  to  be  effective  upon 
the  coming  into  force  of  the  present  Treaty. 


APPENDICES  355 

SECTION  V 
Tsingtao-Tsinanfu  Railway 

Article  XIV 

Japan  shall  transfer  to  China  the  Tsingtao-Tsinanfu  Railway 
and  its  branches,  together  with  all  other  properties  appurtenant 
thereto,  including  wharves,  warehouses  and  other  similar  prop- 
erties. 

Article  XV 

China  undertakes  to  reimburse  to  Japan  the  actual  value  of 
all  the  railway  properties  mentioned  in  the  preceding  Article. 

The  actual  value  to  be  so  reimbursed  shall  consist  of  the  sum 
of  fifty-three  million  four  hundred  and  six  thousand,  one  hun- 
dred and  forty-one  (53,406,141)  gold  Marks  (which  is  the 
assessed  value  of  such  portion  of  the  said  properties  as  was  left 
behind  by  the  Germans),  or  its  equivalent,  plus  the  amount 
which  Japan,  during  her  administration  of  the  Railway,  has 
actually  expended  for  permanent  improvements  on  or  addi- 
tions to  the  said  properties,  less  a  suitable  allowance  for  depre- 
ciation. 

It  is  understood  that  no  charge  will  be  made  with  respect 
to  the  wharves,  warehouses  and  other  similar  properties  men- 
tioned in  the  preceding  Article,  except  for  such  permanent 
improvements  on  or  additions  to  them  as  may  have  been  made 
by  Japan,  during  her  administration  of  the  Railway,  less  a 
suitable  allowance  for  depreciation. 

Article  XVI 

The  Government  of  the  Chinese  Republic  and  the  Govern- 
ment of  Japan  shall  each  appoint  three  Commissioners  to  form 
a  Joint  Railway  Commission,  with  powers  to  appraise  the  actual 
value  of  the  Railway  properties  on  the  basis  defined  in  the 
preceding  Article,  and  to  arrange  the  transfer  of  the  said 
properties. 

Article  XVII 

The  transfer  of  all  the  Railway  properties  under  Article  XIV 
of  the  present  Treaty  shall  be  completed  as  soon  as  possible,  and, 
in  any  case,  not  later  than  nine  months  from  the  date  of  the 
coming  into  force  of  the  present  Treaty. 


356  APPENDICES 

Article  XVIII 

To  effect  the  reimbursement  under  Article  XV  of  the  present 
Treaty,  China  shall  deliver  to  Japan  simultaneously  with  the 
completion  of  the  transfer  of  the  Railway  properties,  Chinese 
Government  Treasury  Notes,  secured  on  the  properties  and 
revenues  of  the  Railway,  and  running  for  a  period  of  fifteen 
years,  but  redeemable,  whether  in  whole  or  in  part,  at  the 
option  of  China,  at  the  end  of  five  years  from  the  date  of  the 
delivery  of  the  said  Treasury  Notes,  or  at  any  time  thereafter 
upon  six  months'  previous  notice. 

Article  XIX 

Pending  the  redemption  of  the  said  Treasury  Notes  under 
the  preceding  Article,  the  Government  of  the  Chinese  Republic 
will  select  and  appoint,  for  so  long  a  period  as  any  part  of  the 
said  Treasury  Notes  shall  remain  unredeemed,  a  Japanese  sub- 
ject to  be  Trafiic  Manager,  and  another  Japanese  subject  to  be 
Chief  Accountant  jointly  with  the  Chinese  Chief  Accountant 
and  with  co-ordinate  functions. 

These  officials  shall  all  be  under  the  direction,  control  and 
supervision  of  the  Chinese  Managing  Director,  and  removable 
for  cause. 

Article  XX 

Financial  details  of  a  technical  character  relating  to  the  said 
Treasury  Notes,  not  provided  for  in  this  Section,  shall  be  deter- 
mined in  common  accord  between  the  Chinese  and  Japanese 
authorities  as  soon  as  possible,  and,  in  any  case,  not  later  than 
six  months  from  the  date  of  the  coming  into  force  of  the  present 
Treaty. 


SECTION  VI 

Extensions  of  the  Tsingtao-Tsinanfu  Railway 

Article  XXI 

The  concessions  relating  to  the  two  extensions  of  the  Tsingtao- 
Tsinanfu  Railway,  namely,  the  Tsinanfu-Shunteh  and  Kaomi- 
Hsuchowf  u  lines,  shall  be  made  open  to  the  common  activity  of 
an  international  financial  group,  on  terms  to  be  arranged  between 
the  Government  of  the  Chinese  Republic  and  the  said  group. 


APPENDICES  357 

SECTION  VII 
Mines 

Article  XXII 

The  mines  of  Tsechwan,  Fangtze  and  Chinlingehen,  for  which 
the  mining  rights  were  formerly  granted  by  China  to  Germany, 
shall  be  handed  over  to  a  company  to  be  formed  under  a  special 
charter  of  the  Government  of  the  Chinese  Republic,  in  which 
the  amount  of  Japanese  capital  shall  not  exceed  that  of  Chinese 
capital. 

The  mode  and  terms  of  such  arrangement  shall  be  determined 
by  the  Joint  Commission  provided  for  in  Article  II  of  the  present 
Treaty. 

SECTION    VIII 
Opening  of  the  Former  German  Leased  Territory  of  Kiaochow 

Article  XXIII 

The  Government  of  Japan  declares  that  it  will  not  seek  the 
establishment  of  an  exclusive  Japanese  settlement,  or  of  an 
international  settlement,  in  the  former  German  Leased  Terri- 
tory of  Kiaochow. 

The  Government  of  the  Chinese  Republic,  on  its  part,  declares 
that  the  entire  area  of  the  former  German  Leased  Territory  of 
Kiaochow  will  be  opened  to  foreign  trade,  and  that  foreign 
nationals  will  be  permitted  freely  to  reside  and  to  carry  on  com- 
merce, industry  and  other  lawful  pursuits  within  such  area. 

Article  XXIV 

The  Government  of  the  Chinese  Republic  further  declares  that 
vested  rights  lawfully  and  equitably  acquired  by  foreign 
nationals  in  the  former  German  Leased  Territory  of  Kiaochow, 
whether  under  the  German  regime  or  during  the  period  of  the 
Japanese  administration,  will  be  respected. 

All  questions  relating  to  the  status  or  validity  of  such  vested 
rights  acquired  by  Japanese  subjects  or  Japanese  companies 
shall  be  adjusted  by  the  Joint  Commission  provided  for  in  Article 
II  of  the  present  Treaty. 


358  APPENDICES 

SECTION   IX 
Salt  Industry 

Article  XXV 

Whereas  the  salt  industry  is  a  Government  monopoly  in  China, 
it  is  agreed  that  the  interests  of  Japanese  subjects  or  Japanese 
companies  actually  engaged  in  the  said  industry  along  the  coast 
of  Kiaochow  Bay  shall  be  purchased  by  the  Government  of  the 
Chinese  Republic  for  fair  compensation,  and  that  the  exporta- 
tion to  Japan  of  a  quantity  of  salt  produced  by  such  industry 
along  the  said  coast  is  to  be  permitted  on  reasonable  terms. 

Arrangements  for  the  above  purposes,  including  the  transfer 
of  the  said  interests  to  the  Government  of  the  Chinese  Republic, 
shall  be  made  by  the  Joint  Commission  provided  for  in  Article 
II  of  the  present  Treaty.  They  shall  be  completed  as  soon  as 
possible,  and,  in  any  case,  not  later  than  six  months  from  the 
date  of  the  coming  into  force  of  the  present  Treaty. 

SECTION    X 
Submarine  Cables 

Article  XXVI 

The  Government  of  Japan  declares  that  all  the  rights,  title 
and  privileges  concerning  the  former  German  submarine  cables 
between  Tsingtao  and  Chef  oo  and  between  Tsingtao  and  Shang- 
hai are  vested  in  China,  with  the  exception  of  those  portions  of 
the  said  two  cables  which  have  been  utilized  by  the  Government 
of  Japan  for  the  laying  of  a  cable  between  Tsingtao  and  Sasebo ; 
it  being  understood  that  the  question  relating  to  the  landing 
and  operation  at  Tsingtao  of  the  said  Tsingtao-Sasebo  cable  shall 
be  adjusted  by  the  Joint  Commission  provided  for  in  Article 
II  of  the  present  Treaty,  subject  to  the  terms  of  the  existing  con- 
tracts to  which  China  is  a  party. 

SECTION   XI 
Wireless  Stations 

Article  XXVII 

The  Government  of  Japan  undertakes  to  transfer  to  the  Gov- 
ernment of  the  Chinese  Republic  the  Japanese  wireless  stations  at 


APPENDICES  359 

Tsingtao  and  Tsinanfu  for  fair  compensation  for  the  value  of 
these  stations,  upon  the  withdrawal  of  the  Japanese  troops  at  the 
said  two  places,  respectively. 

Details  of  such  transfer  and  compensation  shall  be  arranged 
by  the  Joint  Commission  provided  for  in  Article  II  of  the 
present  Treaty. 

Article  XXVIII 

The  present  Treaty  (including  the  Annex  thereto)  shall  be 
ratified,  and  the  ratifications  thereof  shall  be  exchanged  at 
Peking  as  soon  as  possible,  and  not  later  than  four  months  from 
the  date  of  its  signature. 

It  shall  come  into  force  from  the  date  of  the  exchange  of 
ratifications. 

In  witness  whereof,  the  respective  Plenipotentiaries  have 
signed  the  present  Treaty  in  duplicate,  in  the  English  language, 
and  have  affixed  thereto  their  seals. 

Done  at  the  City  of  Washington  this  Fourth  day  of  February, 
One  Thousand  Nine  Hundred  and  Twenty-Two. 

SAO-KE  ALFRED  SZE  [L.S.]        T.  KATO  [L.S.] 

V.  K.  WELLINGTON*  Koo     [L.S.]        K.  SHIDEHARA      [L.S.] 
CHUNG  Hui  WANG  [L.S.]        M.  HANIHARA      [L.S.] 


ANNEX 

I 
Renunciation  of  Preferential  Rights 

The  Government  of  Japan  declares  that  it  renounces  all 
preferenial  rights  with  respect  to  foreign  assistance  in  persons, 
capital  and  material  stipulated  in  the  Treaty  of  March  6,  1898, 
between  China  and  Germany. 

II 

Transfer  of  Public  Properties 

It  is  understood  that  public  properties  to  be  transferred  to 
the  Government  of  the  Chinese  Republic  under  Article  V  of  the 
pr«ent  Treaty  include  (1)  all  public  works,  such  as  roads, 


360  APPENDICES 

water-works,  parks,  drainage  and  sanitary  equipment,  and  (2) 
all  public  enterprises  such  as  those  relating  to  telephone,  electric 
light,  stockyard  and  laundry. 

The  Government  of  the  Chinese  Republic  declares  that  in  the 
management  and  maintenance  of  public  works  to  be  so  trans- 
ferred to  the  Government  of  the  Chinese  Republic,  the  foreign 
community  in  the  former  German  Leased  Territory  of  Kiaochow 
shall  have  fair  representation. 

The  Government  of  the  Chinese  Republic  further  declares 
that,  upon  taking  over  the  telephone  enterprise  in  the  former 
German  Leased  Territory  of  Kiaochow,  it  will  give  due  con- 
sideration to  the  requests  from  the  foreign  community  in  the 
said  Territory  for  such  extensions  and  improvements  in  the  tele- 
phone enterprise  as  may  be  reasonably  required  by  the  general 
interests  of  the  public. 

With  respect  to  public  enterprises  relating  to  electric  light, 
stockyard  and  laundry,  the  Government  of  the  Chinese  Republic, 
upon  taking  them  over,  shall  re-transfer  them  to  the  Chinese 
municipal  authorities  of  Tsingtao,  which  shall,  in  turn,  cause 
commercial  companies  to  be  formed  under  Chinese  laws  for  the 
management  and  working  of  the  said  enterprises,  subject  to' 
municipal  regulation  and  supervision. 

Ill 

Maritime  Customs  at  Tsingtao 

The  Government  of  the  Chinese  Republic  declares  that  it  will 
instruct  the  Inspector  General  of  the  Chinese  Maritime  Cus- 
toms (1)  to  permit  Japanese  traders  in  the  former  German 
Leased  Territory  of  Kiaochow  to  communicate  in  the  Japanese 
language  with  the  Custom  House  of  Tsingtao;  and  (2)  to  give 
consideration,  within  the  limits  of  the  established  service  regula- 
tions of  the  Chinese  Maritime  Customs,  to  the  diverse  needs  of 
the  trade  at  Tsingtao,  in  the  selection  of  a  suitable  staff  for  the 
said  Custom  House. 

IV 

Tsingtao-Tsinanfu  Railway 

Should  the  Joint  Railway  Commission  provided  for  in  Article 
XVI  of  the  present  Treaty  fail  to  reach  an  agreement  on  any 


APPENDICES  361 

matter  within  its  competence,  the  point  or  points  at  issue  shall 
be  taken  up  by  the  Government  of  the  Chinese  Republic  and  the 
Government  of  Japan  for  discussion  and  adjustment  by  means 
of  diplomacy. 

In  the  determination  of  such  point  or  points,  the  Government 
of  the  Chinese  Republic  and  the  Government  of  Japan  shall,  if 
necessary,  obtain  recommendations  of  experts  of  a  third  Power 
or  Powers  who  shall  be  designated  in  common  accord  between 
the  two  Governments. 

V 

Chefoo-Weihsien  Railway 

The  Government  of  Japan  will  not  claim  that  the  option  for 
financing  the  Chefoo-Weihsien  Railway  should  be  made  open 
to  the  common  activity  of  the  International  Financial  Consor- 
tium, provided  that  the  said  Railway  is  to  be  constructed  with 
Chinese  capital. 

VI 

Opening  of  the  Former  German  Leased  Territory  of  Kiaochow 

The  Government  of  the  Chinese  Republic  declares  that,  pend- 
ing the  enactment  and  general  application  of  laws  regulating  the 
system  of  local  self-government  in  China,  the  Chinese  local 
authorities  will  ascertain  the  views  of  the  foreign  residents  in 
the  former  German  Leased  Territory  of  Kiaochow  in  such 
municipal  matters  as  may  directly  affect  their  welfare  and 
interests. 

APPENDIX    Q 

TERMS  OF  UNDERSTANDING  AS  RECORDED  IN  THE  MINUTES  OP  THE 

CHINESE  AND  JAPANESE  DELEGATIONS,  CONCERNING  THE 

CONCLUSION  OF  THE  TREATY  FOR  THE  SETTLEMENT  OF 

OUTSTANDING  QUESTIONS  RELATIVE  TO  SHANTUNG 

I. — Transfer  of  Public  Properties 

1.  Japanese  subjects  will  be  permitted,  subject  to  the  pro- 
visions of  Chinese  law,  to  become  members  or  shareholders  of 
any  of  the  commercial  companies  to  be  formed  with  respect  to 


362  APPENDICES 

public  enterprises  mentioned  in  Paragraph  4  of  Annex  II  of 
the  Treaty. 

II. — Withdrawal  of  Japanese  Troops 

2.  After  the  withdrawal  of  the  Japanese  troops  provided  for 
in  Articles  IX-XI  of  the  Treaty,  no  Japanese  military  force 
of  any  kind  will  remain  in  any  part  of  Shantung. 

III. — Tsingtao-Tsinanfu  Railway 

3.  All  light  railways  constructed  by  Japan  in  Shantung  and 
all  properties  appurtenant  thereto  shall  be  considered  as  part 
of  the  properties  of  the  Tsingtao-Tsinanfu  Railway. 

4.  The  telegraph  lines  along  the  Railway  shall  also  be  con- 
sidered as  part  of  the  Railway  properties. 

5.  The  Chinese  authorities,  upon  taking  over  the  Railway, 
shall  have  full  power  and  discretion  to  retain  or  to  remove  the 
present  employees  of  Japanese  nationality  in  the  service  of  the 
Railway.    In  replacing  such  employees,  reasonable  notice  shall  be 
given  before  the  date  of  the  transfer  of  the  Railway.    Detailed 
arrangements  regarding  the  replacements  to  take  effect  imme- 
diately on  the  transfer  of  the  Railway  are  to  be  made  by  the 
Joint  Railway  Commission  provided  for  in  Article  XVI  of  the 
Treaty. 

6.  The  entire  subordinate  staff  of  the  Japanese  Traffic  Manager 
and  the  Japanese  Chief  Accountant  of  the  Railway  is  to  be 
appointed  by  the  Chinese  Managing  Director.    After  two  years 
and  a  half  from  the  date  of  the  transfer  of  the  Railway,  the 
Chinese  Government  may  appoint  an  Assistant  Traffic  Manager 
of  Chinese  nationality  for  the  period  of  two  years  and  a  half, 
and  such  Chinese  Assistant  Traffic  Manager  may  likewise  be 
appointed  at  any  time  upon  notice  being  given  for  the  redemption 
of  the  Treasury  Notes  under  Article  XVIII  of  the  Treaty. 

7.  The  Chinese  Government  is  under  no  obligation  to  appoint 
Japanese  subjects  as  members  of  the  subordinate  staff  above  men- 
tioned. 

8.  The  redemption  of  the  Treasury  Notes  under  Article  XVIII 
of  the  Treaty  will  not  be  effected  with  funds  raised  from  any 
source  other  than  Chinese. 

9.  The  Chinese  Government  will  ask  the  Japanese  Government 
for  such  information  as  may  be  useful  in  making  the  selection 
of  the  Japanese  Traffic  Manager  and  the  Japanese  Chief  Account- 
ant of  the  Railway. 


APPENDICES  363 

10.  All  questions  relating  to  the  existing  contracts  or  com- 
mitments made  by  the  Japanese  authorities  in  charge  of  the 
Railway  shall  be  settled  by  the  Joint  Railway  Commission  ;  and, 
prior  to  the  transfer  of  the  Railway,  the  said  Japanese  authorities 
will  not  make  any  new  contracts  of  commitments  calculated  to  be 
harmful  to  the  interests  of  the  Railway. 

IV.  —  Opening  of  the  Former  German  Leased  Territory 
of  Kiaochow 

11.  The  term  "lawful  pursuits  "  used  in  Article  XXIII  of 
the  Treaty  shall  not  be  so  construed  as  to  include  agriculture, 
or  any  enterprise  prohibited  by  Chinese  law  or  not  permitted  to 
foreign  nationals  under  the  treaties  between  China  and  foreign 
Powers,  it  being  understood  that  this  definition  shall  be  without 
prejudice  to  the  question  of  the  salt  industry  provided  for  in 
Article  XXV  of  the  Treaty  or  to  any  question  relating  to  vested 
rights  which  shall  be  determined  in  accordance  with  Article 
XXIV  of  the  Treaty. 

V.—  Post  Offices 

12.  All  the  Japanese  Post  Offices  outside  of  the  former  Ger- 
man Leased  Territory  of  Kiaochow  shall  be  withdrawn  simul- 
taneously with  the  transfer  of  the  Tsingtao-Tsinanfu  Railway, 
if  such  transfer  shall  take  place  before  January  1,  1923,  and, 
in  any  case,  not  later  than  the  said  date. 

13.  All  the  Japanese  Post  Offices  within  the  former  German 
Leased  Territory  of  Kiaochow  shall  be  withdrawn  simultaneously 
with  the  transfer  of  the  administration  of  the  said  Territory. 


VL— 

14.  The  omission  of  any  reference  in  the  Treaty  to  the  ques- 
tion of  claims  which  Chinese  citizens  may  have  against  the  Jap- 
anese authority  or  Japanese  subjects,  for  the  restitution  of  real 
property  in  Shantung  or  for  damages  to  the  persons  and  prop- 
erty of  Chinese  citizens  in  Shantung,  shall  not  prejudice    such 
claims. 

15.  The  Chinese  authorities  shall  furnish  the  Japanese  authori- 
ties with  a  list  of  such  claims  together  with  all  available  evidence 
in  support  of  each  claim.    Justice  shall  be  done  through  diplo- 
matic channel  as  regards  the  claims  against  the  Japanese  authori- 
ties, and  through  ordinary  judicial  procedure  as  regards  the 


264  APPENDICES 

claims  against  Japanese  subjects.  With  respect  to  the  latter  class 
of  claims,  the  investigation  into  actual  facts  of  each  case  may,  if 
necessary,  be  conducted  by  a  Joint  Commission  of  Chinese  and 
Japanese  officials,  in  equal  number,  to  be  specially  designated  for 
that  purpose. 

16.  The  Japanese  Government  shall  not  be  held  responsible 
for  any  damages  which  may  have  been  directly  caused  by 
military  operations  of  Japan  during  the  late  war. 

(Initialed)  S.  A.  S. 

(Initialed)     V.  K.W.  K. 

(Initialed)  C.  H.W. 

(Initialed)  T.  K. 

(Initialed)  K.    S. 

(Initialed)  M.  H. 

Washington,  D.  C. 
February  4,  1922. 


[THE  END] 


INDEX 


INDEX 


Abrogation,    the,    of   the    Kiaochow 

Convention,  88-95. 
Accountant,     Chief,    demanded    by 

Japan,  247,  248,  252,  254,  258, 

264,  270. 
Actual  facts  as  basis  for  Shantung 

Conversations,  244. 
Admiral  Diederichs,  27. 
Adoption  of  the  League  of  Nations, 

116. 
Adriatic  question,  the,  113;  similar 

to  the  Shantung  question,  114. 
Aftermath,    the,    of    the    Shantung 

settlement,  150  et  seq. 
Aglen,    Sir    F.     A.,    Inspector    of 

Chinese  Customs  Service,  56,  57. 
Akiyama,    Mr.    Y.,    Japanese    Civil 

Governor      of     the      Kiaochow 

leased  territory,  178. 
Alignment,     the     political,     of     the 

European    Powers    in    the    Far 

East,  40-43. 

Alliance,  the  Anglo-Japanese,  43. 
Allied,  the,  Secret  Agreements,  16, 

66  et  aeq.;  their  real  character, 

76-78. 

Allies,  the,  as  "trustees,"  111. 
Alsace-Lorraine,  13. 
Alternative    solutions,    the,    of    the 

Shantung  question  by  President 

Wilson,  112,  115. 
American     commissioners,     the,     to 

negotiate    peace,    indignant    at 

the  Shantung  settlement,  117. 
American  Minister,  the,  in  Peking, 

87. 

Anglo- Japanese  Alliance,  the,  43. 
Anzer,  Bishop,  26n. 
Arnold,  Julean,  187w. 
Assurance,  the  British,  to  the  De- 
partment of  State,  46n. 
Attempts,   the,   at    "direct   negotia- 
tion," 213  et  seq. 
Attitude,   the,   of   China   explained, 

219-220. 

Baker,  Ray  Stannard,  117,  sent  by 
President  Wilson  to  explain  the 
Shantung  settlement  to  the 


Chinese  delegation,  118;  quoted 
in  extenso  "What  Wilson  did  at 
Paris,"  138-142. 

Balfour,  Mr.  (now  Sir)  Arthur 
James,  refused  to  supply  the 
Chinese  delegation  the  minutes 
on  the  Shantung  decision,  119; 
offered  good  office,  238,  239,  240, 
241,  257,  261. 

Barnardiston,  Major-General,  52. 

"Big  Three,"  the,  19,  21. 

Bliss,  General  Tasker  H.,  pro- 
tested against  the  Shantung 
settlement  at  Paris,  117. 

Borah,  Senator,  of  Idaho,  160. 

Boxer  Indemnity,  the,  83. 

Boycott,  the,  against  Japanese 
goods,  158,  219. 

British  forces  cooperated  in  the 
Tsingtao  expedition,  49,  50. 


Calvo  on  treaty  validity,  90. 

Case,  the,  of  Poshan  mines,  200-201. 

Cassini  Convention,  the,  27,  29. 

Casualties,  the  Japanese,  in  the 
Tsingtao  expedition,  63. 

Chang,  Tsung-hsiang,  Chinese  Min- 
ister at  Tokio,  96. 

Chefoo  railway,  the,  16. 

China  and  the  European  war,  40 
et  seq.,  82,  the  story  recapitu- 
lated, 105-107. 

China's  case  heard  before  the  Coun- 
cil of  Ten,  106-107 ;  counter-pro- 
posals of  Shantung  in  the 
negotiation  of  the  Twenty-one 
Demands,  63-65. 

Chinda,  Viscount,  111. 

Chinese  neutrality,  see  Neutrality. 

Chinese  reply  of  May  22,  1920,  the, 
216-217;  of  October  5,  1921,  223- 
226;  of  November  4,  232-235. 

Cbinlingchen  iron  mines,  the,  187. 

Chin,  Nun-hsun,  Premier  of  China, 
149. 

Chino-Japanese  secret  agreements 
of  1918,  the,  17,  96-101. 

Chino-Japanese  war,  the,  24. 


367 


368 


INDEX 


Civil  Administration,  the  Japanese, 
in  Shantung,  51,  99-100. 

Clemenceau,  Georges,  19. 

Coaling  station,  a,  for  Germany,  25. 

Commercial  activities,  Japan's,  in 
Shantung,  202 ;  commercial  facil- 
ities in  Shantung,  193-197;  Com- 
mercial Handbook  of  China,  202. 

Communique,  the  Japanese  official, 
222w. 

"Compromise  formula,"  the,  262, 
264;  "compromise  settlement" 
proposed  by  the  Chinese  delega- 
tion at  Paris,  115. 

Concessions,  Japan's  final,  220. 

Conference,  the,  at  the  White  House, 
161. 

Contract  (preliminary)  for  Kaomi- 
Hsuchow  and  Shunteh-Tsinan 
railways  signed,  97;  a  spon- 
sion, 98. 

Convention,  the,  of  March  6,  1898, 
33,  34. 

"Conversation"  on  Shantung,  23; 
suspended  by  the  Japanese, 
253;  resumed,  255;  again  sus- 
pended, 259;  again  resumed, 
262;  as  a  compromise  procedure, 
238;  reasons  for,  239-240;  when 
begun,  241 ;  and  how,  242. 

"Council  of  Three,"  the,  116;  "Coun- 
cil of  Ten,"  the,  102,  103,  106; 
"Council  of  Four,"  the,  108, 
110,  111. 

Customs,  the,  at  Tsingtao,  35,  36, 
54  et  seq. 

"Desirable  extent,"  the,  72. 

"Direct  negotiation,"  22;  see  Wash- 
ington Conference,  213  et  seq. 

Demands,  six,  by  Germany  in  1898, 
28. 

Dewey,  Professor  John,  in  China, 
202. 

Dillon,  Dr.  E.  J.,  30. 

Diplomatic  background,  the,  of  the 
Kiaochow  affair,  30-32. 

Disclosure  of  the  Allied  secret 
agreements,  103,  104,  105. 

Dismemberment  of  China,  24-25. 

Displacement  of  Chinese  by  Jap- 
anese on  the  Shantung  railways, 
180-181. 

Draft,  the  preliminary,  by  Chinese 
delegation  at  Versailles,  128. 

Dutasta,  M.,  Secretary-General  of 
the  Peace  Conference,  132. 


Economic  stranglehold,  Japan's,  in 
Shantung,  198-199,  200. 

Effect  of  war  upon  treaties  between 
China  and  Germany,  88-95. 

Engineer,  Chief,  demanded  by  Jap- 
anese, 247,  248,  252,  254. 

European  War,  15. 

Explanation  offered  for  the  Shan- 
tung settlement,  118. 

Failure,  the,  to  bring  the  Shantung 
question  before  the  Washington 
Conference,  and  reasons,  240- 
241. 

Fall  of  Tsingtao,  the,  40  et  seq. 

Fangtze  coal  mine,  the,  185. 

Far  Eastern  Review,  the,  54-57,  184, 
186n, 

Ferguson,  Dr.  John  Calvin,  before 
the  Senate  Foreign  Relations 
Committee,  162. 

"Flying  wedge,"  the,  83. 

Foreign  Relations  Committee  of  the 
Senate,  161-162. 

Formula,  China's  final,  257;  the 
same  unacceptable  to  Japan, 
258 ;  compromise  formula  offered 
by  Hughes  and  Balfour,  262. 

French  diplomacy,  71-73. 

"Full  sovereignty,"  150,  151-152, 
153,  156. 

Geographische  Zeitascrift,  190. 

German  attempt  at  restoration  of 
Kiaochow  to  China  before 
Japan's  ultimatum,  44. 

Germany  in  Shantung,  15,  35-39; 
troops  withdrawn,  36. 

Gold  mines,  the,  in  Shantung,  189. 

"Good  offices"  offered  by  Mr. 
Hughes  and  Mr.  Balfour,  238; 
see  also  Washington  Conference. 

Green,  Sir  Conyngham,  British  Am- 
bassador at  Tokio,  45. 

Hankey,  Sir  Maurice  A.  P.,  113,  130. 
Hanihara,     Mr.,     Vice-Minister     of 

Foreign  Affairs  of  Japan,  245w, 

253. 
Harding,  Senator   (now  President), 

159. 

Hart,  Sir  Robert,  35,  55. 
Henle,  German  Missionary,  26. 
Henry,  Prince,  28. 
Herald,  the  New  York,  189. 
Heyking,   Baron,    German    Minister 

in  Peking,  35. 


INDEX 


369 


Hinterland,    the,   of   Tsingtao,   177- 

178. 
Hioki,   Mr.   Eki,  Japanese   Minister 

in  Peking,  57. 
History,    the,    of    Kiaochow-Tsinan 

Railway,  173-175. 
Hongkong,  14. 
Hughes,    Mr.    Charles    Evans,    238, 

239,  240,  241,  257,  261,  267. 
Hungshan  coal  fields,  the,  187. 

Imperium  in  imperio,  156. 

Independent,  the,  47-48. 

India,  13. 

In  general,  referred  to  in  the  Jap- 
anese Embassy  version  of  the 
note  of  September  7,  221. 

In  principle,  in  the  Chinese  legation 
version,  221. 

Interest  in  the  Kiaochow-Tsinan 
Railway  to  be  retained  by 
Japan,  247  et  seq. 

International  Law,  19,  rules  on 
treaty  validity  stated  and  ex- 
plained, 89-95,  98. 

International  scramble,  14. 

Interview  between  Secretary  Lan- 
sing and  Viscount  Chinda,  116. 

Iron  mines,  the,  at  Chinlingchen, 
187;  in  Shantung,  191. 

Ishii,  Viscount,  84;  statement  on 
"moral  awakening"  of  China,  85, 
86n. 

Japan,  13;  in  Manchuria,  156-157, 
her  diplomacy,  74;  in  Shantung, 
vide  peaceful  penetration;  her 
plea  on  Shantung  presented  be- 
fore the  Council  of  Ten,  103- 
104;  prevented  China  from 
entering  the  war,  82-85,  105. 

Japanese  note  of  February  19,  1920, 
215;  of  June  14,  217-218;  of 
September  7,  1921,  221-222;  of 
October  19,  228-231. 

Johnson,  Senator  Hiram,  of  Cali- 
fornia, 159. 

Joint  Commissions,  278-279. 

Jones,  Senator,  of  Washington,  and 
his  proposal  on  Shantung,  168. 

Jurisdiction,  154. 

Kaiser  and  Kiaochow  Bay,  26n. 

Kaomi-Hsuchow  Railway  line,  the, 
37,  96. 

Kato,  Baron,  43,  45,  60,  242;  state- 
ment, 242-243. 


Kiaochow  Bay,  14;  occupation  by 
Germany,  24  et  seq. 

Kiaochow-Tsinan  Railway  made  a 
Chino-Japanese  joint  enterprise 
by  secret  agreement,  99;  dispute 
over  the  line  taken  up  at  Wash- 
ington, 246  et  seq. 

Kinnosuke,  Adachi,  189. 

Koo,  Dr.  V.  K.  Wellington,  256; 
summarising  the  railway  dis- 
pute, 259-261. 

Korea,  13. 

Krupensky,  M.,  Russian  Ambassa- 
dor at  Tokio,  77-78. 

Lansing-Ishii  Agreement,  the,  re- 
ferred to,  146. 

Lansing,  Mr.  Robert,  65,  95,  107, 
111,  116. 

Last  word  about  Shantung,  278-280. 

League  of  Nations,  the,  and  the 
Shantung  question,  22;  the 
Covenant  adopted,  116;  and  the 
Shantung  settlement,  118;  views 
of  the  Chinese  delegation,  119. 

Letter  to  the  President  of  the  Coun- 
cil of  Three  by  the  Chinese 
delegation  at  Paris,  123-126. 

Liang,  Shih-yi,  254;  rumour  of 
direct  negotiation  at  Peking, 
254-255. 

Li  Ping-heng,  Governor  of  Shan- 
tung, 28. 

Lloyd  George,  19;  defended  the 
Allied  Secret  Agreements,  113. 

Loan,  a  long-term,  to  China,  desired 
by  Japan,  252-253,  256. 

Lodge,  Senator,  of  Massachusetts, 
159;  proposal  on  Shantung 
clauses,  166;  reservation,  167. 

Lou,  Tseng-tsiang,  head  of  the 
Chinese  delegation  at  Paris, 
126;  made  reservation  on  the 
Shantung  settlement  at  Plenary 
Session,  126-127. 

MacMurray,  John  V.  A.,  36n.,  242. 

"Mailed  fist,"  29. 

Makino,  Baron,  66,  111;  surrendered 
his  fight  on  racial  equality,  116- 
117;  issued  to  the  French  press 
a  statement,  126,  150. 

Manchuria,  20,  156;  a  Japanese 
military  camp,  157. 

McCumber,  Senator,  of  North  Da- 
kota, and  his  reservation,  167; 
reservation  analysed,  168. 

Memorandum  by  Sir  Maurice  A.  P. 


370 


INDEX 


Hankey  for  the  confidential  use 
of  the  Chinese  delegation. 
130-131. 

Millard,  Mr.  Thomas  F.,  109. 

Mines,  the,  in  Shantung,  34,  35; 
mining  area  in  Shantung  de- 
fined, 36-37;  183-191. 

Minutes  of  the  Council  of  Three, 
119;  requested  by  the  Chinese 
delegation,  130. 

Missionaries,  German,  26. 

Montono,  Viscount,  68,  69. 

Moore,  John  Bassett,  90,  91. 

"Moral  Awakening"  of  China  and 
her  people,  85,  88,  105,  vide  also 
Ishii. 

Mouravieff,  Count,  Foreign  Minister 
of  Russia,  31n. 

Nagaoka,  Harukazu,  Japanese  ex- 
pert draftsman  at  the  Versailles 
Peace  Conference,  127. 

Neutrality,  Chinese,  45;  violated  by 
Japan,  48-49,  51. 

Nicholas,  Czar,  30. 

Nies,  German  missionary,  26. 

North  China  Daily  News,  27. 

Obata,  Mr.  Yukaichi,  Japanese  Min- 
ister in  Peking,  145,  146,  220. 

Objections,  the,  to  the  terms  of 
settlement  arrived  at  the  Wash- 
ington Conference,  268-272. 

"Observers,"  the,  of  the  American 
and  British  Governments,  288. 

Occupation  of  Kiaochow  Bay  by 
Germany,  24  et  seq. 

Okuma,  Count,  46;  message  to  The 
Independent,  47-48. 

Ono,  Mr.  A.,  representative  of  Jap- 
anese banking  interests,  97. 

"Open  Door,"  the,  in  Shantung, 
38-39;  vide  also  Penetration. 

Opium  War,  the,  14. 

Owen,  Senator,  of  Oklahoma,  and 
his  resolution,  164;  resolution 
analysed,  165. 

Peace  Conference,  the,  vide  Ver- 
sailles. 

Peace  Negotiation,  the,  by  Robert 
Lansing,  107. 

Peaceful  penetration  of  Shantung 
by  Japan,  198  et  seq. 

Peanut  trade,  the,  in  Shantung,  203 ; 
taken  over  by  the  Japanese, 
204-205. 

Pechili,  the  Gulf  of,  21. 


Peck,  Willys  R.,  former  American 
Consul  at  Tsingtao,  202. 

Peking,  an  enclave,  21. 

Pittman,  Senator,  of  Nevada,  and 
reservation,  169. 

Plans  of  payment,  the,  for  Kiao- 
chow-Tsinan  Railway,  247,  248, 
249,  252-253,  255,  264. 

Poindexter,  Senator,  and  his  reso- 
lution on  Shantung,  164. 

Poland,  13. 

Political  Chemistry,  32. 

Poshan  coal  mines,  the,  184;  a  case 
of  peaceful  penetration,  200- 
201. 

Position  of  the  Chinese  delegation  at 
Versailles  on  the  secret  agree- 
ments of  1918,  99-100. 

Position  of  China  at  Versailles  dif- 
ferent from  that  of  Japan,  103; 
difference  explained  and  its 
significance,  102-103. 

Post  offices,  the  Japanese,  in  Shan- 
tung, 209-211;  how  made  use  of 
by  Japan,  210. 

Preliminaries  of  peace,  drafted  by 
the  Chinese  delegation,  128. 

Private  property  in  international 
law,  19. 

Procedure,  the,  adopted  at  the 
Washington  Conference,  a  com- 
promise, 238 ;  a  novel  procedure, 
266-267. 

"Process  of  dispossession,"  the,  201- 
202. 

Proposals  made  by  Japan  for  Shan- 
tung settlement,  221-222;  ana- 
lysed, 222-223. 

Racial  equality  insisted  upon  by 
Japan,  108-109;  the  fight  lost, 
110. 

Railways  in  Shantung,  34,  35,  37, 
96-97,  171-182. 

Ratification  of  the  Versailles  Treaty 
refused  by  the  Senate,  170. 

Reed,  Senator,  of  Missouri,  160. 

Refusal  by  China  to  sign  the  Peace 
Treaty,  133;  decision  communi- 
cated to  Clemenceau,  133-134. 

"Rendezvous"  for  German  ves- 
sels, 25. 

Reservations  by  the  Chinese  dele- 
gation, 126-127,  128,  128-129; 
not  permissible,  130;  objected  to 
by  Japan,  137. 

Resolutions  and  reservations  in  the 
United  States  Senate,  162,  163, 


INDEX 


371 


164,  165,  166,  167,  168,  169;  reso- 
lution of  ratification,  170. 

"Rights  of  Administration,"  the,  not 
sovereignty,  granted  to  Ger- 
many in  Kiaochow,  154. 

Russo-Japanese  war,  the,  21. 

Salt  Industry  in  Shantung,  205-206; 
different  aspects  of,  206-207. 

vSamman  Bay,  surveyed  by  Ger- 
many, 25. 

Schantung     Bergbau     Geselhchaft, 

Schantung  Eisenbahn  Gesellschaft, 
174. 

Scott,  Dr.  James  Brown,  110,  111. 

Secret  Agreements  of  1918,  96 
et  seq.;  reasons  for,  100-101. 

"Secret  Treaties,"  the,  editorial  of 
the  New  York  Times,  78-81. 

Secret  diplomacy,  76. 

Seizure  of  Kiaochow-Tsinan  Rail- 
way by  Japan,  172-173. 

Selden,  Mr.  Charles  A.,  85,  104,  114. 

Senate,  the  United  States,  and  the 
Shantung  question,  159-171. 

Settlement,  an  exclusive  Japanese 
at  Tsingtao,  156. 

Shantung  question,  the,  14,  18,  22- 
23;  Shantung  recognised  as 
German  sphere  of  interest, 
37-38;  seen  from  within,  211;  at 
the  Versailles  Peace  Confer- 
ence, 102  et  seq. 

Sherman,  Senator,  of  Illinois,  159. 

Shidehara,  Baron,  Kijuro,  149;  sum- 
marising the  railway  dispute, 
261,  257,  258;  declining  to  in- 
voke the  good  offices  of  Hughes 
and  Balfour,  258-259. 

Shipping,  the  Japanese,  on  China 
coast,  195-197. 

Smith,  Senator,  of  Georgia,  168. 

South  Manchurian  Railway,  the,  20. 

"Sovereignty,"  Shantung  to  be  re- 
turned in  full,  150,  151,  152,  153; 
distinguished  from  "rights  of 
administration,"  154;  denned, 
154-155. 

Spectator,  The,  26n. 

Spencer,  Senator,  of  Missouri,  163- 
164. 

Sphere  of  Interest,  the,  14;  Shan- 
tung recognised  as  a  German 
sphere,  37,  38. 

Sponsions,  98. 

Stenz,  German  missionary  killed,  26. 

Statements,  the,  issued  by  the  Chi- 


nese delegation  at  Paris,  120- 
122,  122-123,  135-137;  com- 
mented on  by  the  New  York 
Times,  137n;  issued  by  Baron 
Mnkino,  126;  by  Viscount 
Uchida,  151-152;  by  President 
Wilson,  152-153;  by  the  Japa- 
nese Foreign  Office,  214,  215-218. 

Student  movement,  the,  81. 

Submarine  warfare,  China's  protest 
against,  86-87. 

Suspension  of  Shantung  "conversa- 
tions" by  Japan,  253. 

Sze,  Sao-ke  Alfred,  Chinese  Minis- 
ter to  the  United  States,  and 
Chief  delegate  at  the  Washing- 
ton Conference,  242,  249;  his 
statement,  243-244;  his  proposal 
of  payment,  250,  255,  257,  262n, 
263. 


Tachibana,  Mr.,  Japanese  Custom 
Commissioner  in  China,  56. 

Taylor,  Hannis,  authority  on  Inter- 
national Law,  98. 

Terms  of  the  Shantung  Treaty 
analysed,  268-275. 

Testimony  before  the  Senate  For- 
eign Relations  Committee,  162. 

Threat  of  war  on  China  by  Japan, 
144-149. 

The  Times  (London),  29,  50. 

The  New  York  Times,  78,  85. 

Traffic  Manager,  Chief,  demanded 
by  Japan,  247,  248,  252,  254, 
258,  264,  270. 

Treaty  of  Peace  with  Germany,  17; 
its  operation,  21-22. 

Tsinan-Shunteh  railway,  the,  96. 

Tsaochowfu,  26. 

Tsingtao,  the  fall  of,  40  et  seq. 

Tsung-li  Yamen,  the,  32. 

Tuan  Chi-jui,  87. 

Twenty-one  Demands,  the,  16,  60 
et  seq. 

Uchida,  Viscount,  151-152. 

Ultimatum,  the  Japanese,  to  Ger- 
many, 45-47,  48;  Japanese 
ultimatum  to  China,  65. 

Unconditional   restoration,  213. 

Underwood,  Senator,  of  Alabama, 
170,  171. 

Versailles    Peace    Conference,    the, 

17,  102  et  seq. 
Von  Richthofen,  Baron,  26n. 


372 


INDEX 


Walsh,    Senator,    of    Montana,    170, 

262-263. 
War,  the  European,  and  Japan,  40 

et    seq.;    Russo-Japanese,    and 

China,  42,  44. 
War    zone,    the    establishment    of, 

49-50;  the  abolition  of,  53. 
Washington     Conference     and     the 

Shantung  question,  22,  23,  182, 

190,  191,  199,  207,  208,  211,  220, 

226,  227,  228,  236,  237-265. 
Watson,       Senator,       of       Indiana, 

160,  177. 
Weapons    of    peaceful    penetration, 

209. 

Web  of  diplomacy,  20. 
Wei-hai-wei,    surveyed    by    German 

engineer,  25. 


Wei-hsien  coal  field,  the,  186. 

White  House  conference,  161. 

Williams,  Professor  E.  T.,  110;  be- 
fore the  Foreign  Relations 
Committee,  111-112,  115,  116. 

Wilson,  President  Woodrow,  19,  107; 
his  two  alternative  solutions, 
112,  115;  refused  to  make  pub- 
lic the  Bliss  letter,  163  and  note. 

Withdrawal  of  German  troops, 
the,  36. 

Witte,  Count  Sergius,  30. 

Wu  Wei-teh,  Chinese  Minister  to 
France,  131. 

Yangtze  Valley,  the,  British  sphere, 

38. 
Yuan  Shih-kai,  82,  84. 


PREVIOUS  WRITINGS  BY  G.  ZAY  WOOD 


CHINA,    THE    UNITED    STATES    AND    THE 
ANGLO-JAPANESE  ALLIANCE         $2.00 

A  concise  and  interesting  account  of  the  history  of  the 
Anglo-Japanese  alliance,  which  has  been  the  dominant  fac- 
tor in  Far  Eastern  politics  for  the  last  twenty  years. 
Absolutely  the  only  book  on  the  subject,  indispensable  for 
reference. 


THE  TWENTY-ONE  DEMANDS  $2.00 

A  book  that  analyses  impartially  the  Twenty-one  De- 
mands, which  represent  the  somme  totale  of  Japan's  am- 
bitious designs  in  China,  and  the  real  character  and  signifi- 
cance of  which  should  be  universally  understood.  Concise, 
but  comprehensive. 


THE  CHINO-JAPANESE  TREATIES  OF  MAY 
25,  1915  $2.00 

A  companion  volume  to  the  above,  giving  legal,  political, 
economic  and  moral  reasons  for  the  abrogation  of  the 
treaties  growing  out  of  the  Twenty-one  Demands.  An 
immensely  difficult  subject,  but  handled  with  consummate 
skill. 


SOME  PRESS  OPINIONS 

"For  those  who  wish  to  keep  in  handy  form  the  record  of 
past  misunderstandings,  the  capers  and  antics  of  Japanese 
militarism,  the  violations  by  Japan  of  China's  sovereignty, 
and  the  course  of  Chino-Japanese  diplomacy,  especially 
within  the  past  decade,  will  find  what  they  need  in  three 
neat  books.  .  .  .  The  main  facts  are  here,  and  the  three 
books  are  of  permanent  interest.  The  author's  style  is 
clear  and  forcible." — New  York  Evening  Post. 


SOME  PRESS  OPINIONS 

"These  books  are  concise  and  comprehensive  studies  of  the 
great  eastern  issues  indicated  by  the  titles  and  are  useful 
not  only  to  students  of  international  politics,  but  to  all 
of  us  who  desire  adequate  knowledge  of  the  matters  now 
very  much  at  the  front  and  likely  to  be  even  more  so  dur- 
ing the  coming  generation." — Boston  Herald. 

"To  the  students  of  Chinese  and  Japanese  questions  these 
three  volumes  are  well  nigh  indispensable.  The  author 
has  succeeded  in  bringing  into  relief  the  great  matters 
involved  in  a  manner  to  make  them  clear  and  interesting 
even  to  a  school  boy." — United  Presbyterian. 

"They  are  handy  little  reference  volumes." — The  Nation, 
N.  Y. 

"The  books  are  well  made,  convenient  in  arrangement  and 
comfortable  as  to  typography.  They  should  be  in  the 
library  of  every  student  of  Far  Eastern  questions  and 
will  prove  of  interest  and  value  to  the  general  reader." — 
Cleveland  Plain  Dealer. 

"An  impassioned  protest  by  a  Chinese  patriot  against  the 
indignity  offered  to  China  .  .  .  clear  and  ably  written." — 
North  China  Daily  News. 

"These  books  are  of  unquestioned  value  to  the  student  of 
world  politics.  The  appendices  are  one  of  the  important 
features.  The  chapters  are  short,  clear  and  we'll  argued." — 
Boston  Evening  Transcript. 

"They  should  be  useful  to  not  only  students  of  international 
politics,  but  also  to  diplomats,  statesmen,  historians  and 
publicists  who  cannot  afford  to  be  without  adequate  knowl- 
edge on  the  subject." — Gazette  of  Montreal. 

"Three  timely  volumes  .  .  .  deserve  consideration  at  the 
hands  of  any  person  who  wants  to  be  informed  on  the  sub- 
ject of  the  Far  East."— The  Freeman. 

"Fruits  of  patient  research  and  sincere  study." — San  Fran- 
cisco Bulletin. 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 

AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED  FOR  FAILURE  TO  RETURN 
THIS  BOOK  ON  THE  DATE  DUE.  THE  PENALTY 
WILL  INCREASE  TO  SO  CENTS  ON  THE  FOURTH 
DAY  AND  TO  $1.OO  ON  THE  SEVENTH  DAY 
OVERDUE. 


FED  141962 


MAY  29  1S48 


1982: 


lSDec'52VW 


» 


.o  3, 


4922. 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


